A client invested 100 at the start of the month Assume that the manager tracks an assigned benchmark index After 20 days, the portfolio gained 10 percent (value 110), as did the index, and the client added an extra 50 (total portfolio value 160) From day 20 to day 30, the portfolio, and the index, ...

The return on the index is zero as is the properly calculated TWR ...

A client invested 100 at the start of the month. Assume that the manager tracks an assigned

Question:

A client invested €100 at the start of the month. Assume that the manager tracks an assigned benchmark index. After 20 days, the gained 10 percent (value = €110), as did the index, and the client added an extra €50 (total value = €160). From day 20 to day 30, the and the index, lost 9.09 percent-the Final value is €160 X (1 -0.0909) =€145.46. What are the rates of returns using the various methods outlined in the text? Which rate should you use to evaluate the performance of the manager relative to its benchmark?
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...