The average compound return earned per year over a multi-year period when investment inflows and outflows are considered is called the:
A)total return.
B)average capital gains yield.
C)dollar-weighted average return.
D)arithmetic average return.
E)geometric average return.

Question

Quizplus · Accepted Answer

The dollar-weighted average return takes into account the timing and size of the investment inflows and outflows, which can significantly impact the return earned by an investor. The other options do not consider this factor, making the dollar-weighted average return the best choice.

The Average Compound Return Earned Per Year Over a Multi-Year