Portfolio risk and return : part I from Schweser

dee5.v
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Posts: 14
Joined: Wed Aug 29, 2012 5:39 pm

Portfolio risk and return : part I from Schweser

Postby dee5.v » Mon Sep 10, 2012 2:40 pm

Hi,

On page 147 there is an example of calcualting Money weighted return:

Here: Purchase of first share is shown with a + sign.

Later on, in the Concept Checkers section on page 164, the very first question is abt calculating Money weighted return.

Here the Outflow of $40 is accompanied by a - sign.
It is understood that there an Outflow is accompanied by an inflow or an Inflow is impossible without an Outflow.

Why is there a difference in sign ??

PRISTINE REPLY :
In the example it is an inflow to an investment account. So in the example it is the investment account cash flow taken into considerationwhereas in the question it is a cash flow to the investor, so it is investor point of view taken into consideration

My QUERY !!
Hello Sir,
I have checked both the sums. In both, the cash flows are from an Investor. Nowhere does it say an Investment Account? How do I make out if its an A/c or Investor himself ?
Please help.[/b]Please help[/b]
Last edited by dee5.v on Fri Sep 14, 2012 11:22 am, edited 1 time in total.

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shreyas
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Re: Portfolio risk and return : part I from Schweser

Postby shreyas » Mon Sep 10, 2012 5:33 pm

In the example it is an inflow to an investment account. So in the example it is the investment account cash flow taken into consideration


whereas in the question it is a cash flow to the investor, so it is investor point of view taken into consideration

dee5.v
Good Student
Posts: 14
Joined: Wed Aug 29, 2012 5:39 pm

Re: Portfolio risk and return : part I from Schweser

Postby dee5.v » Thu Sep 13, 2012 2:00 pm

Hello Sir,

I have checked both the sums. In both, the cash flows are from an Investor. Nowhere does it say an Investment Account? How do I make out if its an A/c or Investor himself ?

Please help.

Thanks !!


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