- why not CF1=20-2=19?
- TWROR=?
Your task is to compute the investment performance of the Walbright Fund
during 2014. The facts are as follows:
■■ On 1 January 2014, the Walbright Fund had a market value of
$100 million.
■■ During the period 1 January 2014 to 30 April 2014, the stocks in the fund
showed a capital gain of $10 million.
■■ On 1 May 2014, the stocks in the fund paid a total dividend of $2 million.
All dividends were reinvested in additional shares.
■■ Because the fund’s performance had been exceptional, institutions
invested an additional $20 million in Walbright on 1 May 2014, raising
assets under management to $132 million ($100 + $10 + $2 + $20).
■■ On 31 December 2014, Walbright received total dividends of $2.64 mil-
lion. The fund’s market value on 31 December 2014, not including the
$2.64 million in dividends, was $140 million.
■■ The fund made no other interim cash payments during 2014.
Based on the information given, address the following.
1 Compute the Walbright Fund’s time-weighted rate of return.
2 Compute the Walbright Fund’s money-weighted rate of return.
3 Interpret the differences between the time-weighted and money-weighted
rates of return.
why not CF1=20-2=19?
Please share both answer. Is TWROR 18.87% and MWROR 9.9%??
In this example, the time-weighted return (21.03 percent) is greater than the
money-weighted return (20 percent)