Sign up  |  Log in

Annualized return for HF - EoC Q11B book 5

when calculating the annualized return for the Sortino ratio, why do we first calculate the geometric annual return, then take the 12th root and multiply it by 12.

I would have only calculated the geometric annual return but not done step 2 and 3.

thanks!

You’ve made it this far, and you know what it takes to pass. Don’t be fooled by false promises and unrealistic claims. Schweser’s CFA® study packages give you the proven study tools and expert instruction you need to finish the job.

I also would like to know.

I think the difference is if somebody can explain the difference between compounded annual return and annualized return.

Step 1 is getting the compounded annual return. Step 2 and 3 is turning it into annualized return.