Anyone how to calculate rate of return in the following case?

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#19
Hi AlphaQuant,

Thanks. I think I need some time to digest the idea behind XIRR. http://www.mathsisfun.com/money/internal...eturn.html

I have another idea come across my mind. Since there are 2 different individual transactions on the same stock. Each transactions yields different return. Does it make sense, if I calculate using

http://en.wikipedia.org/wiki/Rate_of_ret...le_periods

Transaction on 1st January
$2 * 1000 units = $1000 (1 + r0)
r0 = 1

Transaction on 1st March
$2 * 1000 units = $1000 (1 + r1)^(10/12)
r1 = 1.2974

r = (r0 + r1) / 2 = 1.1487

Of course, the final result isn't tally with XIRR's. But, is it something which makes sense to end users?
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RE: Anyone how to calculate rate of return in the following case? - by yccheok - 07-07-2014, 11:53 PM

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