Your balance at time 0 is $2,000. At time t = 1 3 ; the balance...
Your balance at time 0 is $2,000. At time t = 1 3 ; the balance has grown to $2,500 and a contribution of $1,000 is made. At time t = 2 3 ; the balance has dropped to $3,000 and a withdrawal of $1,500 is made. At the end of the year, the fund balance is $2,000. What is the (TWRR) time-weighted rate of return?
Homework Answers
Time weighted rate of return: A time-weighted rate of return (TWRR) is a calculation designed to measure the performance of the account over the time period invested, and to exclude extraneous elements – specifically, deposits to and withdrawals from an account, as well as transfers in or out.
Rate (TWRR) = [(1+rt,1) * (1+rt,2)....* (1+rt,n)] -1
In this case, we should calculate as below:
Rate (TWRR) = [(1+ (2500-2000)/2000) * (1+ (2000-3500)/3500) ] - 1
Answer: TWRR = -28.57%
QUESTION 1 (6 marks) Deposits of $1000 are made into an investment fund at t = 0 and r 1. The fund balance is $1200...
QUESTION 1 (6 marks) Deposits of $1000 are made into an investment fund at t = 0 and r 1. The fund balance is $1200 just before the deposit at t= 1, and $2200 at 2 (a) [2 marks] Calculate the money-weighted rate of return (MWRR) over the two year period. Express your answer as an effective rate per annum. (b) [2 marks] Calculate the time-weighted rate of return (TWRR) over the two year period. Express your answer as an...
5 pts Question 18 An investment promises the following cash flow stream: $1,000 at Time 0; $2,000 at the end of...
5 pts Question 18 An investment promises the following cash flow stream: $1,000 at Time 0; $2,000 at the end of Year 1 (or att = 1); $3,000 at the end of Year 2:; and $5,000 at the end of Year 3. At a discount rate of 6.5 %, what is the present value of the cash flow stream? Your answer should be between 8343.00 and 11,000.00, rounded to 2 decimal places, with no special characters Question 19 5 pts...
A savings account is opened at time 0 with an initial deposit of $3,000. $2,000 is...
A savings account is opened at time 0 with an initial deposit of $3,000. $2,000 is withdrawn at the end of year 1 and $1,000 is deposited at the end of year 2. The account grows by compound interest at a constant annual effective rate i. At the end of year 2, the account balance is $2,430. Find i.
What is the dollar-weighted return (IRR) for the following fund results? Assume initial fund is $2,000...
What is the dollar-weighted return (IRR) for the following fund results? Assume initial fund is $2,000 and you withdraw all your account balance at the end of year 4. Each cash inflow occurs at the end of each period. year returns 0.085 0.105 cash inflow $5,000 $6,000 $1,000 $0 -0.05 0.0645 4.10% 3.09% 5.56% 2.95%
6. An investor deposits $2000 into a fund at time 0. Four months later when his balance has declined to $1900 he withdraws $300. After four more months his balance is $1800 and he deposits $500....
6. An investor deposits $2000 into a fund at time 0. Four months later when his balance has declined to $1900 he withdraws $300. After four more months his balance is $1800 and he deposits $500. At the end of a year his balance is 2400. a. Find this investor' s (dollar weighted) annual rate of return. (You can assume simple interest.) b. find the fund's annual (time weighted) rate of return. 6a. Current spot rates are si- 0.025, s2...
Sam is a fund manager competing for customers with Arya and Gilly whose investment experience was...
Sam is a fund manager competing for customers with Arya and Gilly whose investment experience was as follows: Gilly Event Arya $0 $1,000 $ 1,020 $ 1,000 $ 2,060 $ 1,000 $ 3,120 $1,000 $ 4,195 12/31/08 Fund Value 1/1/09 Contribution 3/31/09 Fund Value 4/1/09 Contribution 6/30/09 Fund Value 7/1/09 Contribution 9/30/09 Fund Value 10/1/09 Contribution 12/31/10 Fund Value $0 $ 2,000 $ 2,040 $0 $ 2,080 $ 2,000 $ 4,160 $0 $ 4,235 If Sam experienced a time-weighted annual...
Let A be the balance in a fund on January 1, 2018, B be the balance...
Let A be the balance in a fund on January 1, 2018, B be the balance in the fund on September 30, 2018, and C be the balance in the fund on December 31, 2018. a) If there are no deposits or withdrawals during 2018, show that the dollar-weighted rate of return and the time-weighted rate of return for the fund during 2018 are both equal to (C-A)/A. b) If there was a single deposit of Wimmediately after the September...
An investment promises the following cash flow stream: $1,000 at Time 0;$, at the end of...
An investment promises the following cash flow stream: $1,000 at Time 0;$, at the end of year 1(or at t=1); $3,000 at the end of year 2; and $5,000 at the end of year 3. At a discount rate of 7.3%, what is the present value of the flow stream? $2000 at the end of year 1
Y=C+I+G.Y=8,000.G=2,500.T=2,000.C=1,000+2/3 (Y-T).I=1,200-100 r. = C+I+G = 8,000. G = 2,500. T = 2,000. C = 1,000+2/3...
Y=C+I+G.Y=8,000.G=2,500.T=2,000.C=1,000+2/3 (Y-T).I=1,200-100 r. = C+I+G = 8,000. G = 2,500. T = 2,000. C = 1,000+2/3 (Y – T'). I = 1,200 - 100 r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. C. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.
3. Following is the stock price for three stocks for time 0 and time 1. Time...
3. Following is the stock price for three stocks for time 0 and time 1. Time 0 Time 1 #Shares 50 100 80 Stock A splits 2-for-1 between time 0 and 1 Stock Stock Price Price # Shares $55 $100 $60 A $30 $115 $40 A 100 B 100 80 C C What is the value of a price weighted index including all three stocks at time 0? (3 points) a) b) What is the new divisor for a price-weighted...
QUESTION 1 (6 marks) Deposits of $1000 are made into an investment fund at t = 0 and r 1. The fund balance is $1200 just before the deposit at t= 1, and $2200 at 2 (a) [2 marks] Calculate the money-weighted rate of return (MWRR) over the two year period. Express your answer as an effective rate per annum. (b) [2 marks] Calculate the time-weighted rate of return (TWRR) over the two year period. Express your answer as an...
5 pts Question 18 An investment promises the following cash flow stream: $1,000 at Time 0; $2,000 at the end of Year 1 (or att = 1); $3,000 at the end of Year 2:; and $5,000 at the end of Year 3. At a discount rate of 6.5 %, what is the present value of the cash flow stream? Your answer should be between 8343.00 and 11,000.00, rounded to 2 decimal places, with no special characters Question 19 5 pts...
A savings account is opened at time 0 with an initial deposit of $3,000. $2,000 is withdrawn at the end of year 1 and $1,000 is deposited at the end of year 2. The account grows by compound interest at a constant annual effective rate i. At the end of year 2, the account balance is $2,430. Find i.
What is the dollar-weighted return (IRR) for the following fund results? Assume initial fund is $2,000 and you withdraw all your account balance at the end of year 4. Each cash inflow occurs at the end of each period. year returns 0.085 0.105 cash inflow $5,000 $6,000 $1,000 $0 -0.05 0.0645 4.10% 3.09% 5.56% 2.95%
6. An investor deposits $2000 into a fund at time 0. Four months later when his balance has declined to $1900 he withdraws $300. After four more months his balance is $1800 and he deposits $500. At the end of a year his balance is 2400. a. Find this investor' s (dollar weighted) annual rate of return. (You can assume simple interest.) b. find the fund's annual (time weighted) rate of return. 6a. Current spot rates are si- 0.025, s2...
Sam is a fund manager competing for customers with Arya and Gilly whose investment experience was as follows: Gilly Event Arya $0 $1,000 $ 1,020 $ 1,000 $ 2,060 $ 1,000 $ 3,120 $1,000 $ 4,195 12/31/08 Fund Value 1/1/09 Contribution 3/31/09 Fund Value 4/1/09 Contribution 6/30/09 Fund Value 7/1/09 Contribution 9/30/09 Fund Value 10/1/09 Contribution 12/31/10 Fund Value $0 $ 2,000 $ 2,040 $0 $ 2,080 $ 2,000 $ 4,160 $0 $ 4,235 If Sam experienced a time-weighted annual...
Let A be the balance in a fund on January 1, 2018, B be the balance in the fund on September 30, 2018, and C be the balance in the fund on December 31, 2018. a) If there are no deposits or withdrawals during 2018, show that the dollar-weighted rate of return and the time-weighted rate of return for the fund during 2018 are both equal to (C-A)/A. b) If there was a single deposit of Wimmediately after the September...
Y=C+I+G.Y=8,000.G=2,500.T=2,000.C=1,000+2/3 (Y-T).I=1,200-100 r. = C+I+G = 8,000. G = 2,500. T = 2,000. C = 1,000+2/3 (Y – T'). I = 1,200 - 100 r. a. In this economy, compute private saving, public saving, and national saving. b. Find the equilibrium interest rate. C. Now suppose that G is reduced by 500. Compute private saving, public saving, and national saving. d. Find the new equilibrium interest rate.
3. Following is the stock price for three stocks for time 0 and time 1. Time 0 Time 1 #Shares 50 100 80 Stock A splits 2-for-1 between time 0 and 1 Stock Stock Price Price # Shares $55 $100 $60 A $30 $115 $40 A 100 B 100 80 C C What is the value of a price weighted index including all three stocks at time 0? (3 points) a) b) What is the new divisor for a price-weighted...
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