Index return Vs Portfolio return

CFA Level I
#1

Hi, Can anybody tell me the difference between index return and PF return? Do we take in dividends when calculating index return?

#2

I’m assuming this is just a general question since it does not specifically reference any questions on the CFA 1. This would be a violation of the Code. But, dividends are not taken into account when calculating the return on the index. That is why if you buy a portfolio of stocks that mirrors and index, you will outperform the index over time since your dividends will be reinvested (presumably) to buy more shares.

#3

Are you a december taker ? for the index it’s depend if you are calculating a price index or the total return. For the total return, u need to consider the dividend and for the portfolio return u have to consider all the fees that u paid, if you acquired your stocks through borrowing or not, if there are dividends etc

#4

Miss*Yiota Wrote: ------------------------------------------------------- > Are you a december taker ? > > for the index it’s depend if you are calculating a > price index or the total return. For the total > return, u need to consider the dividend Yeh Price Return vs Total Return.

#5

Matori Wrote: ------------------------------------------------------- > Miss*Yiota Wrote: > -------------------------------------------------- > ----- > > Are you a december taker ? > > > > for the index it’s depend if you are calculating > a > > price index or the total return. For the total > > return, u need to consider the dividend > > > Yeh Price Return vs Total Return. Submitted before finishing. As Miss Yiota stated, there are two index return calculations.

#6

I agree with the total return point as well. Good addition.

#7

this thread is a violation of the Code. I hope you all dont get reported. You know CFAI employees troll these boards right?

#8

andytrader Wrote: ------------------------------------------------------- > this thread is a violation of the Code. I hope > you all dont get reported. You know CFAI > employees troll these boards right? that’s a good joke.

#9

Not having been born with a sarcasm gland. Could you tell me how this violates the rules and regulations?

#10

bottoms up?

#11

cmacedo Wrote: ------------------------------------------------------- > Not having been born with a sarcasm gland. Could > you tell me how this violates the rules and > regulations? if i told you how it violates it, it would be another violation.

#12

What do you think about the TWAP question? I said D .134 basis points