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NEW QUESTION: 1
Consider the following transactional information for the investment account of an underwriting syndicate:
1 st Quarter Ending portfolio value: $50,800,000 Total amount invested: $46,100,000
2 nd Quarter Ending portfolio value: $51,100,000 Total amount invested: $50,800,000
3 rd Quarter Ending portfolio value: $51,000,000 Total amount invested: $51,100,000
4 th Quarter Ending portfolio value: $54,500,000 Total amount invested: $50,000,000
Using this information, what is the annual time-weighted rate of return for this portfolio? Assume no taxes or transaction charges.
A. 22.14% per year
B. 19.59% per year
C. 20.59% per year
Answer: C
Explanation:
The time-weighted rate of return is the preferred method of return calculation in the investment management industry, primarily because this method is not sensitive to significant additions and withdrawals of funds from portfolios under examination. The calculation of the time-weighted rate of return involves three steps, which are illustrated as follows:
Step 1:Price the portfolio immediately prior to any significant additions or withdrawals. Separate the portfolio into a series of sub-periods based on the dates of cash inflows and outflows.
Step 2:Calculate the holding period return for each sub-period.
Step 3:Determine the annualized holding period return by linking or compounding the holding period return of each sub-period. If the investment is for more than one year, use the geometric mean of the annual returns as the time-weighted rate of return. If the investment is for less than one year, compound the sub-period returns to obtain an annualized measurement.
To begin the process of determining the time-weighted rate of return, we would break the portfolio up into the subsequent series of cash flows. However, in this example, the cash flows are already aggregated for us and we can move on to the next step: determining the holding period return for each sub-period. This process is detailed as follows:
Quarter 1 holding period return = [($50,800,000 ending value - $46,100,000 invested) / $46,100,000 invested] = 10.19523%
Quarter 2 holding period return = [($51,100,000 ending value - $50,800,000 invested) / $50,800,000 invested] = 0.59055%
Quarter 3 holding period return = [($51,000,000 ending value - $51,100,000 invested) / $51,100,000 invested] = (0.1957%)
Quarter 4 holding period return = [($54,500,000 ending value - $50,000,000 invested) / $50,000,000 invested] = 9.00%
Now that the holding period return for each sub-period has been determined, we must annualize the return measure by taking the product of all four quarterly returns. This process is illustrated below:
[(1 + .10195) * (1 + .00591) * (1 - .00196) * (1 + .09) - 1] = .2059 or 20.59%
When calculating the time-weighted rate of return, remember that the total amount invested is the relevant figure, not the beginning portfolio value. Notice that during the fourth quarter, the total amount invested does not equal the ending amount for the third quarter. This differential could be explained by numerous phenomena. Perhaps the difference is due to a cash withdrawal from the account. Maybe it was used to pay expenses or meet an outstanding margin call. What is important to note is the fact that this money was not invested, and should not be included in the holding period return for the fourth quarter. So said, whenever possible you should use the total amount invested rather than the beginning portfolio value in the calculation of the sub-period holding period return. If you chose 19.59%, remember that in the calculation of the time-weighted rate of return, it is the geometric mean that is used rather than the arithmetic mean.

NEW QUESTION: 2
Which object do you enter in controlling transactions to update a specific valuation in the universal journal?
A. Ledger group.
B. Ledger.
C. Valuation area.
D. Accounting principle.
Answer: A

NEW QUESTION: 3
What is the value of (A + B) ?
(1) B = 12 - 3B.
(2) A2 + 4A - 16 = 0.
A. Either statement BY ITSELF is sufficient to answer the question.
B. Statements (1) and (2) TAKEN TOGETHER are NOT sufficient to answer the question, requiring more data pertaining to the problem.
C. Statement (1) BY ITSELF is sufficient to answer the question, but statement (2) by itself is not.
D. Statements (1) and (2) TAKEN TOGETHER are sufficient to answer the question, even though NEITHER statement BY ITSELF is sufficient.
E. Statement (2) BY ITSELF is sufficient to answer the question, but statement (1) by itself is not.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
From statement (1) we can find the exact value of B.
From statement (2), we can find two answers for variable A, therefore the answer is not unequivocally and both statements taken together are not enough, more sufficient data is needed.

NEW QUESTION: 4
Your network contains an Active Directory domain named contoso.com. All domain controllers run Windows Server 2012 R2. The domain contains two domain controllers.
The domain controllers are configured as shown in the following table.

You configure a user named User1 as a delegated administrator of DC10.
You need to ensure that User1 can log on to DC10 if the network link between the Main site and the Branch site fails.
What should you do?
A. Run repadmin and specify the /prp parameter.
B. Add User1 to the Domain Admins group.
C. On DC10, run ntdsutil and configure the settings in the Roles context.
D. On DC10, modify the User Rights Assignment in Local Policies.
Answer: A
Explanation:
Explanation
repadmin /prp will allow the password caching of the local administrator to the RODC.
This command lists and modifies the Password Replication Policy (PRP) for read-only domain controllers (RODCs).
Reference: RODC Administration
https://technet.microsoft.com/en-us/library/cc755310%28v=ws.10%29.aspx