Example: Price Weighted Series
Given the following series data, calculate the price weighted return over a one-year period.
Stock Price Info for Series 1
To calculate the return over a one-year period, first calculate the price weighted series value at each date.
Price weighted index12/31/2003 = (15 + 25 + 40 + 80) = 40
Price weighted index12/31/2004 = (10 + 30 + 40 + 100) = 45
The one-year return for the price weighted series would thus be (45/40)-1 = 12.5%
Example: Market Weighted Series
Given the following series data, calculate the market weighted return over the one-year period.
Stock Price Info for Series 2
Market weighted return = 390,000 x 100 = 109.59
The 1-year return for the market weighted series would thus be (109.59/100)-1 = 9.59%.
Example: Unweighted Series
Given the following series data, calculate the unweighted return over a one-year period.
Geometric Average = (1.05 * 1.25 * 1.00 * 1.30)1/4 = 1.143
Domestic vs. Global Indexes
Managing WealthWeighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality
InvestingUse these calculations to uncover the risk involved in your investments.
Financial AdvisorAfter passing the first core examination, usually the FINRA Series 6 or Series 7, one hurdle remains. That’s the Series 63, 65 or 66.
InvestingThe key to choosing ETFs for your portfolio is understanding how they pick stocks and making sure their investment philosophy matches yours.
InvestingETF success relies on the index with which it's paired. Discover three index genres for tracking average market performance.
TradingLearn how to calculate a metric that improves on simple variance.
Personal FinanceIf you're getting into the field of investment banking, you'll need to know all about the Series 79.
InvestingLearn how to weigh the relative importances of data points in a calculated average.
InvestingInvestors use the required rate of return to decide where to put their money, and corporations use it to decide if they should pursue a new project.