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balance is $3237 and $620 is withdrawn.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

This is Actuarial Science
Problem 3 - Dollar-weighted and Time-weighted rate of
returns
An investment account has a value of $7000 on 1/1/2014. A deposit
of XX is made on 5/1/2014, a withdrawal of $400 is made on
9/1/2014, and a deposit of $300 is made on 11/1/2014. The balance
on December 31, 2014 is $8074.
Find the amount of the first deposit if the dollar-weighted rate of
return is 6%
X=
Problem 8 - Dollar-weighted and Time-weighted rate of...

Find the time weighted and dollar weighted return for the year.
Note that if an entry in the table is empty, then there was no
withdrawal or deposit at the given date. Hint: Remember that for
the dollar weighted return, it is irrelevant how much is in the
account in periods between the year!)
Date
Value Immediately Before Deposit or Withdrawal
Deposit
Withdrawal
Jan. 1
50
June 1
60
30
Oct. 1
110
20
Dec. 31
70

(d) A fund held by an investment manager had a value of RM2
million on 1 January 2019. RM2.5 million was invested on 1 May
2019. Immediately after this investment, the value of the fund was
RM2.1 million. At the close of business on 31 December 2019, the
value of the fund was 4.2 million.
(i) Calculate the time-weighted rate of return for 2019.
(ii) Calculate the dollar-weighted rate of return for 2019.
(iii) Comment on your answers to part...

5. (2pts) You are given the following information about an
investment account: Date Deposit Balance (before deposit) January 1
10 July 1 X 12 December 31 X Over the year, the time-weighted yield
is 0%, and the dollar-weighted yield rate is Y. Find Y.
6. (2pts) You have to get a car loan of $25,000. The bank will
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Which investment returns a greater future value at time 10; A or
B
INVESTMENT A
time
return
investment
0
$1,000.00
1
3%
2
3%
3
3%
4
3%
5
3%
6
3%
7
3%
8
3%
9
3%
10
3%
INVESTMENT B
time
return
investment
0
$1,000.00
1
-1%
2
2%
3
-1%
4
2%
5
-1%
6
2%
7
-1%
8
6%
9
6%
10
6%

Which investment returns a greater future value at time 10; A or
B
INVESTMENT A
time
return
investment
0
$1,000.00
1
3%
2
3%
3
3%
4
3%
5
3%
6
3%
7
3%
8
3%
9
3%
10
3%
INVESTMENT B
time
return
investment
0
$1,000.00
1
1%
2
3%
3
4%
4
3%
5
-2%
6
4%
7
-2%
8
-1%
9
-5%
10
6%

Time Value of Money Concept The following situations involve the
application of the time value of money concept. Use the full factor
when calculating your results. Use the appropriate present or
future value table: FV of $1, PV of $1, FV of Annuity of $1 and PV
of Annuity of $1 1. Janelle Carter deposited $9,510 in the bank on
January 1, 2000, at an interest rate of 10% compounded annually.
How much has accumulated in the account by January...

Roberts owns 50% of Smith at has a balance in the investment
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Roberts purchases an additional 10% ownership in Smith for $70,000.
Roberts will Dr. Investment in Smith for $70,000 and credit Cash
for $70,000. What additional entry will Roberts be required to make
to reflect the increase in ownership?

On each December 31, you plan to transfer $3,100 from your
checking account into an investment account. The investment account
will earn 6 percent annual interest, which will be added to the
account balance at each year-end. The first deposit will be made
December 31, 2018 (at the end of the period). (Future Value of $1,
Present Value of $1, Future Value Annuity of $1, Present Value
Annuity of $1) (Use appropriate factor(s) from the tables
provided.)
Required: 1. What...

Mary Nesbitt has an investment account with a local ﬁrm, and she
makes contributions to her account as funds become available.
Self-employed, Mary receives money from her clients on an irregular
basis. She began the month of September with a balance in her
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made a deposit into her account on September14. Next, she received
a payment of $2,500 on September 21 and made another contribution.
The value of...

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