Question

You invest $500,000 at the beginning of the year. At the end of the year, the...

You invest $500,000 at the beginning of the year. At the end of the year, the portfolio is worth $545,000. At that time, you add an additional $55,000. At the end of the second year, the portfolio is worth $630,000.

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What is dollar-weighted return (IRR)?

What is time-weighted return?

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Answer #1

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Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text aCopy в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Edting Format Painter Clipboard Alignment Number Cells CO CR CS CT CU CX CY CZ DA DB DC 53 DOLLAR VALUE WEIGHTED RETURN 54 YEAR 56 57 58 59 60 61 62 63 64 65 0 -500000 INITIAL INVESTMENT 155000 ADDITIONAL INVESTMENT 2 630000 WITHDRAWAL ANSWER: 6.88% IRR(CS56:CS58) TIME WEIGHTED RETURN ADD 100 TO RETURN RETURN FOR YEAR 1 RETURN FOR YEAR 2 9.00% [545000/500000-1 ] 5.00% [630000/(545000+55000)-1] 109 67 68 69 70 71 /4 | CALCULATOR .. LOAN OPTIONS 105 TIME WEIGHTED RETURN = 6.98 ANSWER: 6.98% fv. ann CAP STRU VALUE BOX DILUTION DOLLAR COST AVGMORTGAGE EXPO Sheeti Sheet2 Shel erences: BV6 08:19 21-01-2019

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