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.

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

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.

NakedPuts2011

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

nannan66

mcap11 Wrote:
-------------------------------------------------------
> 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