Hi Guys
Can someone please guide me through how to calculate the MWRR on a financial calculator? I am trying to do the example in the CFA text, blue box on page 129.
Start with 1,000,000
Day 5 - contribution of 30,000 Day 16 - contribution of 20,000 Day 30 - final value of 1,080,000
The text gives MWRR of 2.9% but I just can’t get this! I get 9.53%
Thanks!
you can’t do it on a calculator. you need to use trial and error
the IRR function in your calculator only works when cash flows occur regularly period-wise
You can use a calculator. Though i hardly think this calculation is testable.
ProspectiveDreamer, i believe you should be getting 0.09536%?
What you’ve calculated is daily IRR. (1+0.0009536)30-1 should give you 2.9%.
If you are not getting 0.09536%, let me know, I’ll elaborate