Question
This is Actuarial Science: Dollar-weighted and Time-weighted rate of returns For an investment account, you are given the following information during the first 6 months
This is Actuarial Science: Dollar-weighted and Time-weighted rate of returns
For an investment account, you are given the following information during the first 6 months of the year.
Date | Fund Value Before Activity | Deposit |
January 1 | 60 | |
March 15 | 75 | 30 |
May 1 | 65 | 25 |
June 30 | 121 |
a) Use the time-weighted method to calculate the yield rate earned by this investment during the first 6 months. j= % b) Use your answer to part a) to compute the equivalent annual effective interest rate earned by this investment. i= %
You are given the following information about the activity in 2 different investment accounts: Account A
Date | Fund Value Before Activity | Deposit | Withdrawal |
January 1, 2014 | 400 | ||
September 1, 2014 | 445 | X | |
November1, 2014 | 425 | 2X | |
December 31, 2014 | 445 |
Account B
Date | Fund Value Before Activity | Deposit | Withdrawal |
January 1, 2014 | 400 | ||
April 1, 2014 | 445 | X | |
December 31, 2014 | 415.5 |
During 2014, the dollar-weighted return for investment account A equals the time-weighted return for investment account B, which is equal to i. Compute i %
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