Time weighted return return

cmacedo

Based on the follwoing portfolio year end values, what is the time weighted return of a $60m investment closest to

Year 1 $70m - Following the receipt into the fund of $5m at the end of the year

Year 2 $75 m - No receipt at the end of the year

A. 11.3%
B. 9.8%
c. 7.7 %


Answer is A.

HPR1: (70-5) - 60/60 x 100
HPR2: (75-70)/70 x 100

Question: Why are those $5m received in the 1st year subtracted from the HPR calculation? Shouldn't we include dividends in HPR calculations?

(65 - 60 +5)/60 x 100


Please help!