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Basic Question 6 of 11
Multiple of Invested Capital (MOIC) and Internal Rate of Return (IRR) are two metrics that are used in private equity to calculate an investor's return on investment. Which statement is false regarding these two measures?
B. The IRR calculation assumes distributions are reinvested at the same IRR.
C. MOIC tells you how the value of an investment has grown on an annualized basis.
A. Unlike MOIC, IRR allows for investors to understand the impact of varying hold periods on investment returns.
B. The IRR calculation assumes distributions are reinvested at the same IRR.
C. MOIC tells you how the value of an investment has grown on an annualized basis.
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Tamara Schultz
Learning Outcome Statements
describe the performance appraisal of alternative investments
CFA® 2025 Level I Curriculum, Volume 5, Module 2.