Questions tagged [rate-of-return]

For questions relating to various measures of the rate of return on an investment, e.g. Internal Rate of Return, Financial Management Rate of Return, etc. Note that questions about these terms that don't apply to personal finance or actual problems you face, e.g. homework questions, are probably off-topic.

Filter by
Sorted by
Tagged with
3 votes
2 answers
1k views

How to maintain NAV (Net Asset Value) for family fund

I have a Google Sheet which consolidates multiple funds in which I am invested. I also track my trades in the same sheet and update the profits to track XIRR returns overall. This is working fine for ...
Raj Pawan Gumdal's user avatar
2 votes
2 answers
94 views

Money-Weighted Returns calculation clarification

I found out this is the calculation for the Money-Weighted Returns. From what I understand, PVO can also be seen as "Present Value of the portfolio". If this is the case, doesn't the right-...
Wenuka's user avatar
  • 123
1 vote
1 answer
76 views

How to deal with multiple IRR and no IRR situation?

I was doing analysis for a project to be taken which is for a short duration and which has inconsistent discount rates to be applied, thus I cannot use Modified IRR and neither NPV, but I am facing a ...
rajan baswani's user avatar
0 votes
0 answers
34 views

How to evaluate if an asset's return distribution can be modeled by a Gaussian distribution?

How to analyze the distribution of the return? Are there procedures for a bunch of tests to see how well it fits different distributions? Or derivation of formula from the stochastic process?
hello_world's user avatar
0 votes
0 answers
29 views

calculate monthly rate of return on fidelity website

How do I calculate monthly rate of return for a particular investment account on fidelitys website. I have couple of investment accounts and IRAs. I want to understand the change in the investments ...
money.frictionlesspulley's user avatar
0 votes
0 answers
39 views

Why use NOPAT as numerator for ROIC

I have been researching online, and it appears that the prevailing recommendation is to use NOPAT (Net Operating Profit After Taxes) for calculating return on invested capital. The purpose of using ...
user510's user avatar
  • 101
3 votes
1 answer
144 views

How to calculate portfolio performance without tracking each individual transaction

How does one go about calculating the performance of a portfolio when the portfolio is robo-managed and rebalances often, therefore making tracking every transaction and exact holdings over time a ...
Hilikus's user avatar
  • 133
0 votes
2 answers
103 views

How do I compute the annual risk-free return?

I need to know what the annual risk-free rate of return has been. I know no such rate actually exists, so let's say I want to use the "overnight" rate as a proxy. But the overnight rate is ...
Amended's user avatar
0 votes
0 answers
57 views

How to calculate combined win rate of two strategies?

Let's say I have two strategies with different win rates and expectancy, how would I calculate combined win rate without actually calculating each result (only use win rate and expectancy)? Example ...
Jay Tee's user avatar
2 votes
1 answer
82 views

What is the difference between Capitalization Rate and Return on Assets?

In real estate, the capitalization rate (cap rate) is one of the metrics used to assess the rental profitability of a property. The formula for capitalization rate is net operating income divided by ...
Flux's user avatar
  • 16.9k
0 votes
2 answers
45 views

How to deal with spinoffs when calculating money-weighted rate of return (MWRR) of a stock investment

I am using a spreadsheet's XIRR function to calculate the money-weighted rate of return (MWRR) of my investment in "X Corporation" stock. X conducted a spinoff of "Y Corporation". ...
Flux's user avatar
  • 16.9k
2 votes
1 answer
65 views

How to calculate Quartile (or Decile) returns

I have split the following portfolio of 20 stocks into 4 quartiles by say market cap. My main question is how would you calculate the Quartile return? Would you rescale the weights within each group ...
Maddy's user avatar
  • 133
1 vote
1 answer
54 views

Calculate Dividends Return from Total & Price returns

I understand Price returns and Total returns for stock indices. For example, total returns account for Dividends paid by the underlying stocks assuming they are reinvested back into the same. How do ...
Maddy's user avatar
  • 133
3 votes
0 answers
49 views

Is there a correlation between stock market returns and GDP growth in emerging markets?

Contrary to most people's expectations, there is a slight negative correlation between per capita GDP growth and real stock market returns. References: Is There a Link between GDP Growth and Equity ...
Flux's user avatar
  • 16.9k
1 vote
1 answer
105 views

When using TWRR for an individual stock, how do I treat non-reinvested dividends?

I'm researching time-weighted rate of return calculations as a performance metric to use with individual stock security holdings. I've read multiple sources of information to include but not limited ...
tim.rohrer's user avatar
3 votes
1 answer
251 views

How do I calculate the performance of a stock investment in the presence of dividends, additional investment and partial sales?

What is a single metric I can use to calculate the performance of a stock investment in the presence of dividends, additional investment, and partial sales? Such a metric should be comparable across ...
Flux's user avatar
  • 16.9k
0 votes
1 answer
58 views

Calculating CAGR from annual investments

Let's say I invest x amount at the beginning of each year. After N years, my total investments are worth y. How do I calculate the CAGR? As a bonus, assume that my only tool is Google Sheets.
relatively_random's user avatar
2 votes
1 answer
207 views

Understanding Time-Weighted Rate of Return

In general I consider myself a relatively maths-literate person, but I'm really struggling to understand TWRR (Time-Weighted Rate of Return); at least as my investment provider is presenting it to me. ...
Andrew Ferrier's user avatar
2 votes
0 answers
31 views

How to calculate profits from a short position [duplicate]

Say I have a $100 balance, the margin requirement is 10%, I short a stock at $100, and the stock drops down to $10, is my profit 90% or 1000%? To more more specific, is the profit 90% relative to my ...
blahahaaahahaa's user avatar
4 votes
2 answers
474 views

How is the average return rate of the S&P 500 annual return calculated?

I am trying to understand where the famous average return rate of about 10% of the S&P 500 comes from. In most conversations, the usual starting date is on 1965. Its averaging closing value at ...
Patrick.B's user avatar
  • 143
2 votes
2 answers
57 views

CAGR of Monthly Close Prices

In step 7 in this tableau tutorial he uses the number of periods as 12 I believe this number should change. So for instance if we started with January to March, the number of period would be 3. Then ...
user3553260's user avatar
6 votes
2 answers
3k views

What is the real return of a portfolio? Markowitz vs "real" return

I am working with mean variance optimization (MVO) and as such after "training" my model I test the results on a test dataset. Markowitz states that the return of a portfolio is the "...
Ventura's user avatar
  • 63
0 votes
0 answers
94 views

How to calculate distribution return for ETF?

I'm trying to calculate Growth and Distribution returns for ASX:VGS for 2021 based on historical data, but the results do not match what's published. Here I can see that in the 2021 Calendar year it ...
Maxim Mazurok's user avatar
0 votes
1 answer
118 views

Using Sharpe ratio to compare bitcoin investments?

I want to compare investment strategies in bitcoin. So far I was using the money weighted rate of return and was comparing it between two different investors. The investor that has the biggest rate of ...
LeGom's user avatar
  • 107
-1 votes
2 answers
138 views

What's the formula behind these two stock trading scenarios?

Let's say I have $10,000 in my account. Scenario 1: If I make 10 trades in a year and each trade I position size using only 25% every time and exit the trade after a 10% gain, my account would grow by ...
Jay's user avatar
  • 1
0 votes
1 answer
77 views

Is it possible for the dividend rate to decrease at a constant rate to the future?

I came across the following question; Mayfair corporation is expected to pay 40% dividends to its shareholders as its next dividend. However, the company announces that it is not expecting to pay a ...
S. Tiss's user avatar
  • 11
3 votes
1 answer
311 views

How to calculate an annualized rate of return with a number of cash-secured Puts?

For cash-secured-puts I know how to calculate the annual return of a single one like: (Returns divided by Capital at Risk) x (365 divided by Holding Period in days) With a "wheel" strategy (...
user640916's user avatar
-2 votes
1 answer
209 views

Scratching my head about the modified dietz method

I'm trying to compute the money weighted rate of return for my crypto investments using the modified dietz method, as I believe this is the golden standard to measure investment. The formula is quite ...
LeGom's user avatar
  • 107
1 vote
6 answers
4k views

Why isn't there a universal investment standard/benchmark?

When I watch golf and look at the results of the top players, I can immediately know exactly how they compare both to the standard (called par) and to each other. Why doesn't investing have such a ...
soakley's user avatar
  • 320
0 votes
1 answer
38 views

What is the reason for higher returns in ELSS mutual funds when compared to other flexi cap equity mutual fund?

In general, how does ELSS mutual funds generate higher returns over long term (say 5 years or so) when compared to flexi cap mutual funds? As far I know, in general both the segment of mutual fund ...
Darshan L's user avatar
  • 143
0 votes
1 answer
20 views

Calculate the required return using an asset pricing model

The current stock price of HHBA A is 101.00$. The last dividend payed for HHBA A is 3.50$, and dividends are expected to grow at a constant rate of 6%. Now i should calculate the required return using ...
Hrvoje Krizic's user avatar
1 vote
1 answer
66 views

What is "the index-linked variety"?

I am reading this article on The Economist. It says that the new generation will gather lower returns on investments than the previous generations. The authors estimated the future return on equities ...
robertspierre's user avatar
2 votes
1 answer
272 views

Calculating portfolio returns from multiple stocks using XIRR

I am confused and would like some clarification. For around four years I have been building a portfolio of 30 stocks and I would like to calculate the portfolio returns as accurately as possible over ...
Liam's user avatar
  • 41
6 votes
2 answers
2k views

How do you factor in inflation when calculating internal rate of return on an investment?

Say you invest $1000 into a venture on day 1. Then you invest another $1000 on day 365. Then, on day 730, its market value is worth $4000. If I were to put these numbers into an Excel spreadsheet like:...
Cerin's user avatar
  • 233
2 votes
1 answer
178 views

How to Calculate Return of Multi Positional Trading Strategy

i have a trading strategy that buy multiple stocks in same time and sell another time. I want to calculate return of this strategy. Below table shows my positions that opened and closed. From above to ...
FCTURKEY's user avatar
1 vote
1 answer
161 views

Money-Weighted-Return (MWR) or Time-Weighted-Return (TWR)?

Assume, I monthly invest a fixed part of my income. I strictly transfer this money to my broker account and never take money off (transfer-rule). There, I usually (but not always) immediately add to a ...
Clyde Frog's user avatar
2 votes
1 answer
104 views

What's wrong with the XIRR calculation here?

I am trying to learn how to use XIRR following tutorials.I think I'm overlooking something with this dataset problem when using Google Sheets to calculate XIRR. Can someone be kind enough to explain ...
R11G's user avatar
  • 123
1 vote
1 answer
68 views

What am I missing with this XIRR calculation?

I have 70K at the beginning of the year invested in some fund with the below yield each month, is it correct that the IRR would be 50.90%? What am I missing? In some article that I've read, they were ...
Omer's user avatar
  • 65
1 vote
2 answers
213 views

0% rate of return + inflation differs from inflation alone

Given that Real Rate of Return = (1 + nominal rate) / (1 + inflation rate) -1 If my nominal rate equals the inflation rate I get 0, meaning that my money is worth the same no matter the inflation ...
f.rodrigues's user avatar
0 votes
1 answer
26 views

Derive Initial investment based on Compounded returns

I know the investment instruments, their average yearly returns, the duration of investment and the target corpus. Based on the target corpus and the average returns, I want to reverse engineer and ...
Sid's user avatar
  • 103
0 votes
1 answer
89 views

Average Annual Total Return - How to calculate fractional number of years?

Per the SEC Form N-1A, P(1+T)n = ERV Where: P=a hypothetical initial payment of $1,000. T=average annual total return. n =number of years. ERV= ending redeemable value of a hypothetical $1,000 ...
James's user avatar
  • 101
1 vote
2 answers
107 views

Comparison of expected returns from index funds and single shares

I shall start by saying I know little about markets, investing or gambling, but I do know a little bit about probability. This question is prompted by comments to this question, such as "As a ...
Dave's user avatar
  • 823
0 votes
1 answer
205 views

Why would banks offer negative interest rates?

I recently saw news that Danish bank Danske Bank is going to be offering -1% return on balances over $16,000. Obviously nobody wants a negative return on their balances so nobody is going to want this....
Runeaway3's user avatar
  • 2,864
1 vote
2 answers
140 views

calculating stock investment return

Please help. I am stuck. I am still pretty new to investing, so please be nice and a simple explanation is much appreciated. I want to calculate the capital gains (NO DIVIDEND) annual return of a ...
Patrizia Zaccarelli's user avatar
0 votes
0 answers
40 views

Comparing ROI taxed at ordinary income vs cap gains?

How can I demonstrate the performance of an investment that's taxed as ordinary income to one that's taxed at cap gains rates? I run a small real estate investment fund, focused on flipping properties,...
user53325's user avatar
  • 101
0 votes
2 answers
168 views

What is the highest return risk-free investment available?

Investing is about balancing risk and reward. Any good investment will typically allow for nominal risk for a healthy return, but let's suppose that's not what I'm looking for. I want something with ...
TheEnvironmentalist's user avatar
1 vote
1 answer
95 views

Calculating the rolling performance of two securities over time

If I want to compare the relative price performance of two equities, an easy way would be to calculate the Comparative Relative Strength (CRS) and graph the result. The calculation is simple. Divide ...
Bob Baerker's user avatar
  • 75.8k
1 vote
1 answer
108 views

How to calculate effective rate of return for annuity payments and annuity receipts?

There is an annuity annual payment of 100000 from year(s) 1-7. After these payments, there are annuity annual receipts of 153127 from year(s) 8-15. I want to know what is the effective return on this ...
Ramesam Subbana's user avatar
1 vote
2 answers
141 views

Proper way to annualize returns

Searching for "how to annualize interest rates" on Google leads to the following results: Wikihow's How to Annualize a Percentage Investopedia's Annualized Rate of Return Wikihow ...
Paul Razvan Berg's user avatar
0 votes
1 answer
43 views

Computed 401K RoR differs from broker's information

I have a 401k through Fidelity and have recently started being more active in the market. I was haphazardly selecting funds that seemed to do well but apparently wasn't the most advantageous due to ...
pstatix's user avatar
  • 353

1
2 3 4 5 6