Exam ila lam section a1 - Study guides, Class notes & Summaries
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Exam ILA LAM Section A.1
- Exam (elaborations) • 32 pages • 2024
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r_t = (MV_t - MV_(t-1))/(MV_(t-1)) 
 
If CF occurs BOP t: (MV_t - (MV_(t-1) + CF_t))/(MV_(t-1) + CF_t) 
 
If CF occurs EOP t: ((MV_t - CF_t) - MV_(t-1))/(MV_(t-1)) 
 
Total rate of return - answer-Includes realized and unrealized capital gains in addition to income 
-Allows return to be compared across different types of investments 
-Became more popular after the 1960s 
 *Higher asset volatility 
 *Higher investor sophistication 
 *Greater computing power 
 
time-weighted rate of return - answe...
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