# 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.

176 questions
Filter by
Sorted by
Tagged with
3k views

### How can I calculate total return of stock with partial sale?

I have searched the internet for hours and still can't find the formula to calculate the Total Return in percentage with the below scenario. Bought 310 shares at \$3.15 brokerage \$19.95 Sold 200 ...
235 views

### Clarify Microsoft's explanation of MIRR

I don't understand Microsoft's MIRR example. The second parameter is the finance_rate: Finance_rate Required. The interest rate you pay on the money used in the cash flows. The example then ...
700 views

### When investing, is the risk/reward tradeoff linear?

Rule 1 of investing is that the more risk you're willing to take, the higher your potential for reward. Bonds are low-risk and come with maybe 1-2% returns, stocks much higher risk and maybe 5-15% ...
8k views

### How to calculate the return over a period from daily returns?

If I have daily returns of my portfolio over a period (let's say January to December), how do I calculate the total return over the period or per month? What I did now is the following: Calculate ...
93 views

### What is the rate of return for a security when there is no risk-free rate (CAPM)?

Let say I want to invest 1000€ in cryptocurrencies in order to get 2000€ In the famous CAPM, the relationship between risk and rates of returns in a security is described as follows: For a security ...
867 views

### Annualized Return vs CAGR of Investment

I am a bit confused by the the two terms 'Annualized Return' and 'CAGR' (compounded annual growth rate). The definition for annulized return is here. The definiton for CAGR I have taken from here. My ...
869 views

### Investing/business with other people's money: How does it work?

I have heard of this phrased such as "OPM" -- basically, "other people's money." It's something said that, if you don't have the funds necessary to invest, use someone else's money. What does this ...
253 views

### Why is IRR used as a measurement of an investment's profitability?

I am new to money.SE so please forgive if this question is not in keeping with the norms of the site, and let me know how I can improve it. I have a fundamental question about concept of internal ...
694 views

### Calculating returns on a stock: different ways?

I am comparing two ways of calculating the total return on one stock over time and I would like to know if they both make sense. When would you use one over the other and do they have specific names? ...
639 views

### How are average annual returns calculated on an index fund?

I am trying to understand the average annual returns on this index fund: VFTSX according to its data on Vanguard's Price & Performance page. It shows, under "Average annual returns", the ...
156 views

### Calculator to compare mixed portfolio returns [closed]

I've had my IRA in Betterment for the past 2.5 yrs. Betterment invests in low fee ETF's only and charges 0.15%/yr in fess. They allow the user to manage their portfolio only by changing the ...
137 views

### How do you calculate the RRR on a portfolio given component returns?

Imagine you invest in the following stocks: \$11,600 of A, \$7,800 of B, \$14,900 of C, and \$3,200 of D. The required returns on these stocks are 10.7%, 15.4%, 3.9%, 9.1%, respectively. What is the ...
200 views

### Should monthly return or annualized be used?

If I have an average monthly return on capital of 5%, is it more common to use that number for performance or use the annualized value of 60%? I believe the annualized value is what hedge funds and ...
5k views

### Are Certificates of Deposit worth it compared to investing in the stock market?

Looking at roughly 0.05% for a CD to 5% for a stock portfolio. That's a huge difference in return. For example, with \$10K, that's a 4.95 percentage point difference! In general, does a diverse ...
60 views

### Return calculation on a security that you are rebalancing

Suppose you have some security A, and the suppose the following: Initial amount of security bought: 100 Initial price: \$10 Suppose after some time: Sold qty: 10 Sold at: 11 Then you buy some ...
2k views

### “Rule of 72” For Higher Multiples?

The rule of 72 states that if I earn n% interest, I can divide 72 by n and get the approximate number of years that I'll double my money. Suppose that I wanted to find out how many years to quadruple ...
617 views

### XIRR not working for this dataset. Any other method to calculate rate of return?

For this particular dataset xirr is not returning any reasonable value either in excel or google spreadsheet. What is the option to calculate the rate of return in cases like this?? Sl-no date ...
3k views

### Does investing more money into stocks increase chances of profit?

Assume someone wanted to invest in stocks for the sole purpose of profiting as soon as possible. Given the risky nature of stocks, would investing bigger amounts of money increase the chances of more ...
291 views

### When I calculate “internal rate of return (IRR)”, should I include cash balance?

When investing in the stock market, some methods need a cash balance in the broker's account. For example, a new investor has \$20,000 to invest. She buys stock worth \$10,000. The remaining \$10,000 is ...
785 views

### Should I be disappointed with my investment returns?

I put \$46,000 in an IRA 10 years ago. I have never made any additional deposits. The value is now \$58,000. I feel it should be worth more. All of it is in mutual funds.
374 views

### Accepting high volatility for high long-term returns

According to modern portfolio theory investors can pick a trade-off between expected returns and volatility along a certain curve. If someone is investing for the very long term (decades until ...
347 views

### How to compute real return including expense ratio

I am currently hesitating between 2 similar International Index Fund, FSIVX and FIENX. FSIVX have an expense ratio of 0.12% while FIENX have 0.63%. I can try to compare them side by side on google ...
4k views

### 401k compound interest vs other compound interest

Whenever I see the presentations or documents imploring me to invest in 401k and retirement, it always shows a nice graph showing a 7% compound interest and how less money saved earlier in your 20s ...
237 views

### What's the folly with this stock selection strategy

I am very leery of investing in Stocks over here. I have tested some other Asian markets and gotten some returns. Rather than have my money depreciate (less interest than Current Inflation ), I'd ...
446 views

### difference in cagr and irr

I am trying to understand the IRR, XIRR and CAGR functions better. See the link below for my examples. I am looking at a very simple example of 20K invested and 50K returned at the end of an ...
413 views

### Calculate APY revolving loan with offset/staggered payment schedule?

I want to buy a weekly meal ticket, 7 lunches for \$7, but do not have \$7 today. Lender says, "I will loan you a consecutive series of 5 meal tickets for 5 consecutive weeks (35 consecutive lunches as ...
185 views

### How do you calculate return on investment for a share of stock?

How do you calculate the return on investment for a single share of stock? For example, what would be the return/value of a single Google share now, if bought in January 2015?
153 views

### Understanding the personalized Rate of Return

In my 403k web site, I saw that my personalized rate of return as 4.25%. To understand it, I clicked the question mark. Your personalized rate of return (PRR) represents the specific performance ...
63 views

### Using Index Returns in Retirement Investment Planning

In retirement planning one of the inputs to a forecast is an assumption about return on investments... and there are a number of rules of thumb thrown around. 6%, 8%, something that goes from higher ...
122 views

### How can “fund performance” and “unit values” go in opposite directions?

I have a "variable annuity" with Lincoln. They have a "historic unit values" page that says fund X increased 40% since the end of last year, to yesterday. And that fund Y increased 23%. But they ...
470 views

### How to calculate mutual fund return

How do you calculate the annual return of a mutual fund? I understand roughly how mutual funds work, and I'm trying to decide which mutual funds to invest in, but to prove to myself that I understand ...
125 views

### Why compare asset performance using returns, instead of using change factors?

Why do investors compare the returns of assets as opposed to the change factors of assets? E.g. comparing 6% / 4% instead of 106% / 104% to get the comparative performance of two assets. AFAIK ...
237 views

### Why adjust for inflation annually, as opposed to realising it after the holding period?

Why do investors offset their annual returns against inflation, when inflation isn't realised until the end of the holding period (when the investor is actually spending the money)? An example: ...
48 views

### What numbers to look for investment returns

I'm exploring the field of investments and would like to know roughly what numbers and estimates have to be looked at for a company that is going to become public soon. For instance, if I buy 10% of ...
327 views

### What return are you getting on your money from paying down a mortgage on a rental property?

If you bought a \$200,000 rental home with 20% down, what is the return on investment you're earning over the full 30 year period from paying down the loan using the rental income? We will assume the ...
1k views

### How do you calculate the annualised return of your portfolio from the annualised returns of each of your funds?

I've invested in a number of mutual funds, and I've calculated the annualised return of each of them, using a spreadsheet (and the xirr function). I want to calculate the annualised return of the ...
694 views

### Calculating Simple Portfolio Returns with Rebalancing or Adding/Removing Securities

Given a set of portfolio weights, w, and historical security prices, I am looking to calculate a simple portfolio return via: where R is the simple return for a given security from time t to t+1: ...
348 views

### Excel formula for calculating interest rate of earning

On January 1st I invest 1238. I do this every January 1st for 20 years. At the end of 20 years (So December 31st of the 20th year), I have 32880 in the account. What's my rate of interest? By playing ...
864 views

### Can you have a positive return with a balance below cost basis?

I use Fidelity for an investment. Their website says I have a cost basis of \$5000.00 invested in FUSVX. Now the balance of this mutual fund (which I believe is simply market value at closing from ...
747 views

### Cumulative Return between two dates

I have a table that carries data with cumulative return of some instrument. Data is described with start date, end date and cumulative return for date range (start-end): Start Date|End Date |...
130 views

### Looking for an ROI formula, brain is broken today

This is honestly a pretty simple problem, but for whatever reason I am not able to pull it all together. I was talking theoretically with a friend and neither of us can nail down the math so I coming ...
987 views

### Calculating return on a series of stock positions with multiple uneven transactions

How can I calculate the return on a series of stock positions with multiple uneven transactions that I can compare to the equivalent buy and hold return over the same period? Random Example: Starting ...
6k views

### Converting annual interbank rates into monthly rates

I have a time series of the three month interbank rate each month. I suppose that the rate is give annually. I need these interbank rates to be on a monthly basis because I want to us these rate as a ...
134 views

### How is the return rate on index funds calculated?

For example, i was viewing this mid-cap index fund: http://www.bloomberg.com/quote/VMGRX:US It says the annual return is 16.41%. How is that calculated? The index has not risen enough in price over ...
253 views

### Is this Employee Stock Purchase Plan worth it when adding my student loan into the equation?

Here are the details of my company's Employee Stock Purchase Plan: An automatic 5% purchase discount off the fair market value of the stock. Payroll deductions start on July 1st. The stock purchase ...
625 views

### What evidence or research suggests that mid- or small-capitalization stocks should perform better than large caps?

In my 401k I have always allocated a greater percentage of my portfolio into mid cap funds because they seem to be riskier and have a higher upside. Yet, as of the past year or so, the large cap funds ...
557 views

### How to Calculate Annual Return of A Fund When Contribution is Irregular?

I am struggling to calculate the annual return rate for this investment. Initial Investment on 20-May-2010 \$2500 Regular contribution of \$250 from 12-July-2010 to 10-10-2013. Total units ...
977 views

### A calculator that takes into account portfolio rebalancing? [closed]

I'm looking for a calculator that takes into account rebalancing when estimating total returns using historical data. For example, I'd input the following into the calculator: I have an initial \$10,...