medium · Frm Part 2 Risk & Investment Management
An institutional investor is reviewing a new hedge fund index. The index shows an average annual return of 11.0% over 20 years.
If the index is subject to backfill bias estimated at 1.5% and survivorship bias estimated at 2.5%, what is the most defensible 'bias-adjusted' historical return?
- 9.5%
- 8.5%
- 7.0%
- 15.0%
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