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Difference between twrr and lirr

D

dimitris13

Member
Hi,
What is the difference between twrr and lirr? So far i see that the equations are the same and just in the old past exams they use lirr and at later exams twrr

thanks
 
I am not sure which past papers you refer to. I wouldnt say that TWRR and LIRR are the same though. A TWRR breaks the period down into shorter periods inside which there are no external cashflows. It then calculates the returns for each of these as per the core reading formula and geometrically chains them together. A LIRR is an approximation to this where the period is broken down into shorter periods (often monthly). There may well be cashflows inside these periods. The MWRR returns for each of these are geometrically chained together at the end in the same way as a TWRR though.
 
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