## Portfolio risk and return : part I from Schweser

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

### Portfolio risk and return : part I from Schweser

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 ??

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 ?
Last edited by dee5.v on Fri Sep 14, 2012 11:22 am, edited 1 time in total.

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shreyas
Finance Junkie
Posts: 83
Joined: Thu Jul 19, 2012 6:49 pm

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

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

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 ?

Thanks !!