Arithmetic Geometric Dollar Returns

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This video provides a quick overview of arithmetic average, geometric (time-weighted), and dollar-weighted approaches to calculating average returns. The arithmetic average is the simplest, but least effective method. The geometric is the best method for calculating the underlying return, but can be misleading when factoring in the changing value of your account. The dollar-weighted is best for looking at the true compounding rate of your investment portfolio over time.
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Could you do an explanation and solve to show the Heston stochastic volatility model? Similar to the explanation you did on Black Scholes, would be very useful/helpful - thanks!

evancampbell
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Is it possible to use the Dollar-Weighted Average return formula with several different contribution values? Instead of being fixed at $4, 000 annually?

randomvideosfrommyphone
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Hi Kevin, Excellent video. How about CAGR? Does this represent a better rate of growth and returns. Will this be the same as Dollar Weighted Average? Thanks

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