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# Money-Weighted Rate of Return

Hello:

I am enrolled in CIPM Level 1 and not as a Level 1 CFA candidate. I have been unable to come up with the right answer or enter it correctly in my BA II Plus calculator.

From the textbook, calculate the internal rate of return of a portfolio with following valuation points and external cash flow (where dollar amounts are in millions):

Market Value 31 March \$56.3

Market Value (prior to cash flow) 11 April \$58.2

Contribution (made at end of the day 11 April \$9.8

Market Value 30 April \$69.6

Solution: 69.6 = 56.3 x (1 + R) + 9.8 x (1 + R) 19/30 = 5.61% ((1 + R) is raised to 19/30 - I am not sure how to show it as an exponent)

Note: The mid-period valuation on April 11 is not necessary for completing the IRR calculation.

Thank you.

• To show 19/30 as an exponent, you just press the “yˆx” button, then "(", then "19/30", then ")", then "="

Does this help?

• I tried it in CF mode and got 5.41%. Not sure what I'm doing wrong...

CF0 = -56.3

C01 = 0

F01 = 10

C02 = -9.8

F02 = 1

C03 = 0

F03 = 19

C04 = 69.6

CPT IRR = 0.1757% (per day)

IRR (30 days) = (1.001757)^30 = 5.4%

• Thank you! I appreciate it and that helps a lot.

• So close! I repeated the same great strategy as above on my BAII and got the answer with a couple edits:

The F03 entry should just be 18, since there are 18 zeros after the 11th and prior to the 30th.

Then the IRR shown is 0.181949818%.

Once that is taken in gross to the 30th power, you get 1.05605

This leads to the IRR for the period as about 5.61%. Best of luck!!!

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• Ah awesome, thanks for the help! F04 would be 1 of course, so F03 will have to be 18.