Modified Dietz method: Difference between revisions

Revision as of 01:53, 10 November 2021

Revision as of 01:59, 10 November 2021

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so in this case, the modified Dietz return is noticeably less than the unannualized IRR. This divergence between the modified Dietz return and the unannualized internal rate of return is due to a significant flow within the period, and the fact that the returns are large.

'''''ThisThe IRR calculation is incorrect above - the IRR is actually 50%: (since 100 x (1 + 50%)^2 + 50 x (1+50%) = 300'''''), but the unannualized holding period return, using the IRR method, is 125%.

==The simple Dietz method==