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Asset costs and accumulated depreciation were tracked by "vintage accounts" consisting of all assets within a class acquired in a particular tax year. All vintage accounts for the same year were assumed placed in service in the middle of the year; however, a taxpayer could elect the modified half year convention with potentially favorable results.
Frequent asset class rebalancing and maintaining a diversified portfolio can lead to substantial costs and fees, which may reduce overall returns. Accurately predicting the optimal times to invest in or sell out of various asset classes is difficult, and poor timing can adversely affect returns.
This difference between the portfolio return and the benchmark return is known as the active return. The active return is the component of a portfolio's performance that arises from the fact that the portfolio is actively managed. Different kinds of performance attribution provide different ways of explaining the active return.
Asset classes and asset class categories are often mixed together. In other words, describing large-cap stocks or short-term bonds as asset classes is incorrect. These investment vehicles are asset class categories, and are used for diversification purposes. Multiple asset classes mixed together in a fund structure can provide an investor with ...
After its recent surge to $60,000, Bitcoin has become the best performing asset class of the decade with an annualized return of 230%, data shows. What Happened: The data, which was compiled by ...
The rate of return on a portfolio can be calculated indirectly as the weighted average rate of return on the various assets within the portfolio. [3] The weights are proportional to the value of the assets within the portfolio, to take into account what portion of the portfolio each individual return represents in calculating the contribution of that asset to the return on the portfolio.
Historical simulation in finance's value at risk (VaR) analysis is a procedure for predicting the value at risk by 'simulating' or constructing the cumulative distribution function (CDF) of assets returns over time assuming that future returns will be directly sampled from past returns.
The first stage consists of fitting a series of local factor models of the familiar form resulting in a set of factor returns f(i,j,t) where f(i,j,t) is the return to factor i in the jth local model at t. The factor returns are then fit to a second stage model of the form