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Computing compound returns
Hi i like to seek some info on calculating compound returns
lets say i have 2 stocks, Stock A and B
Stock A i invest $1000
Returns $1500
50% return
Stock B i invest $1000
Returns $2000
100% return
Is my calculation right as shown below?
Hold for 2 years then sell, therefore my calculation will be: [(1+0.5)*(1+1)]^0.5
Lets say i have a third stock call Stock C and i lost everything in this stock which means 100% loss.
Stock C i invest $200
Returns $-200
-100% return
How do i calculate this into compound returns? should it be [(1+0.5)*(1+1)*(1+(-1))]^0.5
If i use the method above by including stock C, i will get an ans of zero even when stock C investment is less than A and B.
Is my method correct or i should i use this method to calculate:
[(1500+2000+0)/(1000+1000+200)] - 1
Then take the ans above and calculate using power of 0.5
Pls advise..
thanks
Edited 1 time(s). Last edit at Sunday, February 27, 2011 at 04:33PM by vitalstrike82. |
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发表于 2011-7-13 13:46
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