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Basic Question 4 of 6
On January 7, 2013, an investor purchases 100 shares of stock for $32.50 a share. On 7 January 2014, the investor purchases 100 more shares of the same stock for $36.70 a share. On 7 January 2015, the investor sells all 200 shares of the stock for $42.00 a share. The internal rate of return for this investment is best described as an example of a ______.
B. time-weighted rate of return
C. money-weighted rate of return
A. geometric mean return
B. time-weighted rate of return
C. money-weighted rate of return
User Contributed Comments 3
| User | Comment |
|---|---|
| Yrazzaq88 | Dollar-weighted = CPT IRR function (Inserting through CF first) |
| msk500 | You are not required to do computations here--just know that IRR = Money/dollar-weighted return. |
| andyansong | by definition calculating the money weighted rate of return is just like making the irr the subject and solving for the irr in the equation.irr is an example of mwr |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
compare the money-weighted and time-weighted rates of return and evaluate the performance of portfolios based on these measures
CFA® 2024 Level I Curriculum, Volume 1, Module 1.