Modified Dietz method: Difference between revisions

Revision as of 19:39, 14 May 2025

Revision as of 19:40, 14 May 2025

Line 219:

:{{nowrap begin}}{{link if exists|average capital}}{{nowrap end}}

::{{nowrap begin}}= {{link if exists|start value}} -− {{link if exists|time weight}} × {{link if exists|outflow amount}}{{nowrap end}}

::{{nowrap begin}}= 10,000 -− {{sfrac|1|4}} × $8,000{{nowrap end}}

::{{nowrap begin}}= 10,000 -− $2,000{{nowrap end}}

::{{nowrap begin}}= $8,000{{nowrap end}}

The average capital of the shares over the last quarter requires no calculation, because there are no flows after the beginning of the last quarter. It is the $8,000 invested in the shares. However, the average capital in the shares over the whole year is something else. The start value of the shares at the beginning of the year was zero, and there was an inflow of $8,000 at the beginning of the last quarter, so:

:{{nowrap begin}}{{link if exists|average capital}}{{nowrap end}}

::{{nowrap begin}}= {{link if exists|start value}} -− {{link if exists|time weight}} × {{link if exists|outflow amount}}{{nowrap end}}

::{{nowrap begin}}= 0 + {{sfrac|1|4}} × $8,000{{nowrap end}}

::{{nowrap begin}}= $2,000{{nowrap end}}