Returns for periods greater than one year should be measured using the internal rate of return.

Name: Returns for periods greater than one year should be measured using the internal rate of return.
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Question

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The internal rate of return (IRR) is a preferred method for measuring returns over periods longer than one year because it accounts for the time value of money and provides a consistent rate of return that can be compared across different types of investments.

Returns for Periods Greater Than One Year Should Be Measured