Question

This is actuarial science: Dollar-weighted and Time-weighted rate of returns


An investment account has a value of $2000 on 1/1/2014. On 7/1/2014, the value of the account has increased to $2022 and a deposit of X is made. On 10/1/2014, the value of the account balance is $3237 and $620 is withdrawn. On 1/1/2015, the investment account is worth $2688.

Compute the time-weighted rate of return if the dollar-weighted rate of return is equal to 7.39%.
iT=

For an investment account, you are given the following information during calendar years 2014 and 2015:

Account for 2014

Date	Fund Value Before Activity	Deposit	Withdrawal
January 1, 2014	150
March 1, 2014	165	20
July 1, 2014	160		15
November 1, 2014	165	15
December 31, 2014	X

Account for 2015

Date	Fund Value Before Activity	Deposit	Withdrawal
January 1, 2015	X
September 1, 2015	197	10
December 31, 2015	Y

During 2014, the dollar-weighted return equals 8%. During 2015, the time-weighted return equals 10%. Determine the value of the fund at the end of 2014 and 2015.
X=
Y=

Answer 1