Time WR and Money WR

CFA Level I Quant
#1

Practice Question on Time Weighted and Money Weighted returns:

When funds are withdrawn from an account prior to a period of weak performance:

Correct answer: Time WR < Money WR

Doubt --> If funds are disbursed prior to a weak performance period, shouldn’t the return of the weak period be overweighting the money weighted return? thus the time weighted overperforming the money weighted?

Thanks

#2

Funds are disbursed, so there’s less money in the account; weak returns are underweighted.

#3

Right… the problem is actually my english! haha

Thanks

#4

I’ll bet that your English is ten times as good as my Spanish is!

¡Apuesto a que su Inglés es diez veces mejor que mi español es!