Exam ila lam section a1 - Study guides, Class notes & Summaries

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...