BMV Cash inflow EMV Date of cash flow Days in Month ROR $ $ $ 200.00 20.00 240.00 10 31 $ 700.00 $ (130.00) $ 525.00 18 30 Started with $200 and invested an additional $25 on the 5th day of a 31-day month. Ending value = $240.00 Started with $700 and withdrew $150 on the 15th day of a 30-day month. Ending value = $525.00
BMV Cash inflow EMV Date of cash flow Days in Month ROR $ $ $ 200.00 20.00 240.00 10 31 $ 700.00 $ (130.00) $ 525.00 18 30 Started with $200 and invested an additional $25 on the 5th day of a 31-day month. Ending value = $240.00 Started with $700 and withdrew $150 on the 15th day of a 30-day month. Ending value = $525.00
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Ee 75.
Transcribed Image Text:How to determine a portfolio's rate of return when it has experienced cash flows.
Monthly Return
Example:
BMV
Cash flow
Date of cash flow
EMV
Days in Month
ROR
Homework:
BMV
Cash inflow
EMV
Date of cash flow
Days in Month
ROR
Ś 100.00
$
10.00
$
10
120.00
31
9.37%
S 200.00
$
20.00
$
240.00
10
31
$ 100.00
$
(10.00)
10
$
120.00
31
32.18%
$ 700.00
$ (130.00)
$ 525.00
18
30
Example:
Started with $100 and invested an additional $10 on the 10th day of a 31-day month. Ending value = $120.00
Started with $100 and withdrew $10 on the 10th day of a 31-day month. Ending value = $120.00
"how many days did the portfolio have the contribution?" = 20 out of 31 days.
Started with $200 and invested an additional $25 on the 5th day of a 31-day month. Ending value = $240.00
Started with $700 and withdrew $150 on the 15th day of a 30-day month. Ending value = $525.00
(EMV - BMV Net Cash Flows)
(BMV + each cashflow x
(Number of days left in period
days in period
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