For each of the past six quarters, Managers L and M have provided you with the total dollar value of the funds they manage, along with the quarterly contributions or withdrawals made by their clients. (Note: Contributions are indicated by positive numbers, withdrawals by negative numbers.) MANAGER L MANAGER M Quarter Total Funds Under Management Contributions/ Withdrawals Total Funds Under Management Contributions/ Withdrawals Initial 500,000 - 700,000 - 1 527,000 12,000 692,000 (35,000) 2 530,000 7,500 663,000 (35,000) 3 555,000 13,500 621,000 (35,000) 4 580,000 6,500 612,000 (35,000) 5 625,000 10,000 625,000 (35,000) For each manager, calculate: a. Her money-weighted return b. Her time-weighted return c. Estimates of her quarterly performance returns using the Dietz approximation method, assuming that contributions/withdrawals are made exactly halfway through the quarter
For each of the past six quarters, Managers L and M have provided you with the total dollar value of the funds they manage, along with the quarterly contributions or withdrawals made by their clients. (Note: Contributions are indicated by positive numbers, withdrawals by negative numbers.) MANAGER L MANAGER M Quarter Total Funds Under Management Contributions/ Withdrawals Total Funds Under Management Contributions/ Withdrawals Initial 500,000 - 700,000 - 1 527,000 12,000 692,000 (35,000) 2 530,000 7,500 663,000 (35,000) 3 555,000 13,500 621,000 (35,000) 4 580,000 6,500 612,000 (35,000) 5 625,000 10,000 625,000 (35,000) For each manager, calculate: a. Her money-weighted return b. Her time-weighted return c. Estimates of her quarterly performance returns using the Dietz approximation method, assuming that contributions/withdrawals are made exactly halfway through the quarter
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
| For each of the past six quarters, Managers L and M have provided you with the total dollar value of the funds they manage, along with the quarterly contributions or withdrawals made by their clients. (Note: Contributions are indicated by positive numbers, withdrawals by negative numbers.) |
| MANAGER L | MANAGER M | |||
| Quarter | Total Funds Under Management | Contributions/ Withdrawals | Total Funds Under Management | Contributions/ Withdrawals |
| Initial | 500,000 | - | 700,000 | - |
| 1 | 527,000 | 12,000 | 692,000 | (35,000) |
| 2 | 530,000 | 7,500 | 663,000 | (35,000) |
| 3 | 555,000 | 13,500 | 621,000 | (35,000) |
| 4 | 580,000 | 6,500 | 612,000 | (35,000) |
| 5 | 625,000 | 10,000 | 625,000 | (35,000) |
| For each manager, calculate: | |||||||||
| a. Her money-weighted return | |||||||||
| b. Her time-weighted return | |||||||||
| c. Estimates of her quarterly performance returns using the Dietz approximation method, assuming that contributions/withdrawals are made exactly halfway through the quarter |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 8 steps with 8 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education