## DEFINITION of Beginning Market Value (BMV)

Beginning market value (BMV) is the valuation at which a property or investment should exchange at the date of origination, and then at the beginning of each subsequent period. The beginning market value at the start of every period is thus equal to the ending market value of the previous period. Here, the market value is based on what both the buyer and seller (effectively, the market), deem to be the true value of the property in question. Market value is similar to market price given that the market remains efficient and the players are rational.

This may be contrasted with the Ending Market Value (EMV), which is the value of an investment at the end of the investment period. In private equity, the ending market value, also called the residual value, is the remaining equity that a limited partner has in a fund. It may also be contrasted with average market value (AMV), which is the average value of an investment over a certain period.

## BREAKING DOWN Beginning Market Value (BMV)

The beginning market value (BMV) is the total value of securities held in an investment account at the beginning of a reporting period, for instance each quarter. In an account with a number of investments including stocks, bonds, options, and mutual funds will have a BMV will typically be calculated for each asset type individually. It can also be referred to as the value of an investment at the time its position is first entered.

The BMV is simply the ending market value of the previous period. The ending market value of the previous period is calculated as the beginning market value at time t-1 multiplied by 1 plus the rate of returned over that period. By looking at the ending market value and comparing it to the beginning market value, we can see how much return we have made for the current period. These periodic returns can be linked together in a time-weighted rate of return to calculate a multi-period rate of return.

For example, assume that in time t=0 the beginning market value of a share of XYZ stock is $10.00. Returns are assessed on a monthly basis. After a month passes (time t=1), the market value of XYZ stock is $12.00. So the BMV for time t=0 is $10 and its EMV is $12.00, generating a 20% return on investment (ROI). $12.00 is therefore the beginning market value at time t=1, and so on.