D
dannyp123
Member
Hi,
October 2015 paper, Q4 (iii) asks that the total return on the index over 2011 be calculated.
The formula used in the ASET answer: TRI(t) = (I(t) + (XD(t) - XD(t-1))) / I(t-1) {*}
This formula does not appear in the course notes which is confusing me, the course notes state the formula is:
TRI(t) = TRI(t-1)*(I(t) + XD(t) - XD(t-1)) / I(t-1)
OR
TRI(t) = (I(t) - I(t-1) + XD(t) - XD(t-1)) / I(t-1)
I dont understand why the term TRI(t-1) has been dropped in the answers. I am finding a theme where the connection between the formulas in the course notes don't seem to be applied to the questions, changes are made to them without much commentary. I know the problem is just that I am not following it, but I feel the course notes / and or ASET could provide more helpful commentary to link the two.
Could someone explain why the TRI(t-1) term is dropped? Also where formula {*} is listed in the course notes?
Thanks,
Dan
October 2015 paper, Q4 (iii) asks that the total return on the index over 2011 be calculated.
The formula used in the ASET answer: TRI(t) = (I(t) + (XD(t) - XD(t-1))) / I(t-1) {*}
This formula does not appear in the course notes which is confusing me, the course notes state the formula is:
TRI(t) = TRI(t-1)*(I(t) + XD(t) - XD(t-1)) / I(t-1)
OR
TRI(t) = (I(t) - I(t-1) + XD(t) - XD(t-1)) / I(t-1)
I dont understand why the term TRI(t-1) has been dropped in the answers. I am finding a theme where the connection between the formulas in the course notes don't seem to be applied to the questions, changes are made to them without much commentary. I know the problem is just that I am not following it, but I feel the course notes / and or ASET could provide more helpful commentary to link the two.
Could someone explain why the TRI(t-1) term is dropped? Also where formula {*} is listed in the course notes?
Thanks,
Dan