Drawdown Table - Exhibit 18 - Reading 35 - Page 226

CFA Level III
#1

Hi,

I am a bit confused with the “Cummulative Drawdown” in this table:
For example: June 2011, the cumulative should be: (-1.13) + (-1.67) = -2.8, it not -2.78% which is stated in the table. (Do not get me wrong, but I do not think it is because of rounding).

Is there any miscalculation here?

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#2

Since these are returns they need to be multiplied and not added together.

For example, it should be (1-.0113) * (1-.0167) which results in .9722. This is a cumulative return of -2.78%.

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#3

All clear, thanks.