September 2012
Beginner
328 pages
7h 42m
English
The money-weighted rate of return earned by a fund is the same as the internal rate of return – i.e. the interest rate which it is necessary to use when discounting all the cashflows of the fund, including the initial cashflow, withdrawals, additions and income, to achieve a zero net present value (NPV).
The time-weighted rate of return is the rate earned by a fund calculated by compounding the absolute returns achieved over each consecutive period marked by the withdrawal of money from the fund or the addition of new money to it.
An internal rate of return is sometimes known as a money-weighted rate of return, because the rate so calculated ...
Read now
Unlock full access