不懂考点

问题如下：

Question

Investor A and Investor B invest in a fund for two years:

Given the information in the table, which of the following is least likely to be an explanation for the difference between the two money-weighted rates of return?

选项：

A.Investor A increased the investment in the fund at the end of year 1 whereas investor B did not make any additions or withdrawals. B.Investor B decreased the investment in the fund at the end of year 1 whereas investor A did not make any additions or withdrawals. C.The investors invested different amounts at inception and afterward did not make any additions or withdrawals.

解释：

Solution

C is correct. The money-weighted rate of return (MWR) is sensitive to the additions and withdrawals of funds in a portfolio over the course of an investment. If, at inception, investors A and B invest amounts of different size in the same fund but then neither add nor withdraw any cash for two years, they will obtain exactly the same MWR. In contrast, if investor A increases the investment in the fund at the end of year 1 and investor B does not make any additions or withdrawals, then Investor A will have a lower MWR than investor B because in year 2 the fund underperformed with respect to year 1. By the same token, if investor B decreases the investment at the end of year 1 and investor A does not make any additions or withdrawals, then investor B will have a higher MWR than investor A because she decreased the investment before an underperforming year.

A is incorrect. If investor A increases the investment in the fund at the end of year 1 and investor B does not make any additions or withdrawals, then the former will have a lower MWR than the latter because in year 2 the fund underperformed with respect to year 1.

B is incorrect. If investor B decreases the investment at the end of year 1 and investor A does not make any additions or withdrawals, then the former will have a higher MWR than the latter because she decreased the investment before an underperforming year.