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Rates of Return on a Portfolio

Money Weighted

 

PVs of Cash Inflow = PVs of Cash Outflows

Solve for discounting rate 'r'

 


 
Time Weighted
 

Form subperiods over the accounting period

  • Compute HPR for each subperiod
  • Multiply (1+HPR) for each subperiod to get the total return

 





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