- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 1. Rates and Returns
- Subject 2. Rates of Return
CFA Practice Question
Which return measure reflects a constant dollar investment at the beginning of each time period?
A. Arithmetic mean
B. Geometric mean
C. Holding period return
Explanation: The geometric mean reflects a buy-and-hold strategy.
User Contributed Comments 1
| User | Comment |
|---|---|
| Mikehuynh | Arithmetic mean: - constant $ investment at the beginning of each time period - no compounding effect - > geometric mean, only equal if the time periods are the same |