# simple MWR

Money weighted return The pygmalion account is valued at \$750,000 at the stat of the month. On day 22, a contribution of \$20,000 is made. At the end of the month, the account is worth \$1266,513. Assuming a 30 day month the daily MWR is closest to??? Schweser does \$1,266,513 = \$750,000(1+R)^30+20,000(1+R)^8 R = 1.7% Assuming I do not want to do trial & error on exam day how do you do this on calculator adjusting for the 22 days?

When setting CFs: CF0 = 750,000 C01 = 0 F01 = 21 (i.e. effectively say that CFs for the next 21 days are 0s) C02 = 20,000 F02 = 1 C03 = 0 F03 = 7 C04 = -1,266,513 Now solve for IRR p.s. I don’t think we’re expected to solve such problems (with uneven number of days) on the exam.

Thanks Tany!!!

For MWR you need to have an even amount of time between periods to be able to do it in the calculator. Also I think the HP12c has a max of 30 periods.

Hey - thanks all! I just worked through your examples above on my HP 12c and got the 1.7%! It makes me feel better (like I actually know what I am doing…) Your examples made it easier for me to learn how to do it on the calc!

wtf… I understand this concept but can’t calc it on my 12c… what is the F01 button? Also, when working through the swap problems (reading 35) how do you calc the swap price or rate on the 12c once you have the different int rates for each year and you have the PVed total cash flows for all the forward commodity prices… So lame that I can’t do these calcs… thank you

I think he means, Hit “F” then 1

Sorry, I don’t know how to do it on 12c, I have TI BAIIC

got that thanks… now how do you solve the swap calc: for instance \$36.473 = (X/((1.06)^2) + (X/(1.06^3)) solving for X…

Do 1.06^2 then hit 1/x button then do 1.06^3 and hit 1/x button add those two together and Divide that number into 36.473… So 1/1.06^2 = 0.88999644 & 1/1.06^3 = 0.839619283 0.8999644 + 0.839619283 = 1.729612723 X = 36.473/1.729615723 X = 21.08764299

ok… didn’t know if there was like some 12c magic I could engage in… but old fashioned works fine… 