medium · CFA Level I quant

Vesper Foods' investment account experiences a large capital contribution immediately preceding a period of significant market decline.

Which statement regarding the account's performance measures is most likely correct?

  1. The money-weighted rate of return (MWRR) will be lower than the time-weighted rate of return (TWRR).
  2. The arithmetic mean will equal the geometric mean regardless of the return volatility.
  3. The time-weighted rate of return (TWRR) will be lower than the money-weighted rate of return (MWRR).

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