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Money-Weighted Rate of Return

kas742kas742 St. Louis MO Posts: 2 Associate


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.


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