IPS Return Calc: Add or Multiply? addition, required, correct, instead, return

Zesty

I use the geometric method to get the required return and have been correct doing this, but I do see addition used as an alternative. Is there any instance in which I would be incorrect to multiply instead of add?



Edited 1 time(s). Last edit at Sunday, April 17, 2011 at 11:17AM by CFABLACKBELT.

NakedPuts2011

Stalla (Dave Hetherington) said many times in his lectures that it didnt matter which method you used, either are correct.

nannan66

mcap11 Wrote:
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> Stalla (Dave Hetherington) said many times in his
> lectures that it didnt matter which method you
> used, either are correct.

I heard him say that as well. It's all about documenting how you arrived at your final answer. The grader can pick up where you might have used a wrong input or made a wrong assumption and can still award partial credit.

NO EXCUSES

NakedPuts00

hopefully I get an EZ Grader. as in "Plain Clothes" circa 1980's

lcai

CFAI generally seems to:

* ADD for individual IPS
* MULTIPLY for institutional IPS

Though multiplying is more correct, and should always get you full marks.

mik82

multiperiod - multiply
single period - add or multiply would give you a very small difference. (and since process is what is looked at - both would be accepted).

CP