On Feb 24, 11:01 am, Dkline <DKline(removethis)@massmutual.com> wrote:
> I have used the XIRR function which returns an Effective
> Annual Rate of Return.
> [....]
> How do I convert the -61.52% into a ROR for the quarter?
There are two schools of thought on this. The academic world is split
50-50.
The simplest approach is to compute a simple (non-compounded) rate by
dividing the XIRR result by 4. Personally, I think that is wrong,
especially if you are using XIRR.
The other approach is to compute the compounded quarterly rate. For
example, RATE(4,0,-1,1+XIRR(...)). Alternatively: (1+XIRR(...))^
(1/4)-1.
The "correctness" of one approach over the other depends, in part, on
how you plan to use the quarterly rate. But since XIRR per se is
compounded daily, I would say that any sub-annual rate derived from
XIRR should be a compounded rate.
----- original formula -----
On Feb 24, 11:01*am, Dkline <DKline(removethis)@massmutual.com> wrote:
> I have used the XIRR function which returns an Effective Annual Rate of Return.
>
> 9/30/2008 * * * -$104,119.16
> 10/1/2008 * * * $942.05
> 10/6/2008 * * * -$4,924.67
> 11/1/2008 * * * $944.31
> 11/3/2008 * * * -$4,966.81
> 12/1/2008 * * * $945.74
> 12/3/2008 * * * -$5,274.03
> 12/31/2008 $92,520.92
> * * * * -61.52%
>
> How do I convert the -61.52% into a ROR for the quarter?
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