The Numéraire Problem in Equity Return Measurement: Why Reported Returns in Inflatable Fiat Currencies Are Analytically Hollow (opens in new tab)

Jim Presting in this paper discusses the flaws with equity return measurement: This paper argues that the conventional practice of reporting equity returns in units of fiat currency-the dollar, the euro-produces a measurement that is, in any analytically meaningful sense, hollow. A return is a ratio of two quantities. When the denominator is itself a […]