Weighted rate of return refers to the geometric average of the rate of return during the whole time period after calculating the amount-weighted rate of return per unit time period. Similar to the geometric average rate of return, consider the time value of funds and apply the idea of compound interest.

1. The time-weighted rate of return is the average rate of return in each holding period.

According to different average calculation methods, it can be divided into arithmetic average time-weighted rate of return and geometric average time-weighted rate of return.

Calculate the average yield of each holding period according to the arithmetic average method, which is called the arithmetic average time-weighted yield.

Calculate the average yield of each holding period according to the geometric average method, which is called geometric average time-weighted yield.

The difference between time-weighted rate of return and geometric average rate of return is that time-weighted rate of return does not open to n power, while geometric average rate of return opens to n power. This means that the time-weighted rate of return describes the total rate of return of n-period 1 yuan investment, while the geometric average rate of return is to calculate the average rate of return of n-period 1 yuan investment.

2. Average rate of return

The average rate of return on project investment, also known as the average accounting profit rate, refers to the ratio of the average annual net income of investment projects to the average investment amount of projects. The average rate of return on stocks refers to the total rate of return divided by the number of stocks. The average return rate of funds is the statistical value of the annualized average monthly return rate of funds, which is used to calculate the standard deviation of fund returns. The average rate of return is not exactly the same as the three-year annualized rate of return of the fund.

3. Weighting method

A set of data is given, in which 3 appears 6 times, 4 appears 3 times and 2 appears 1 time. 6,3 and 1 are called weights. This method is called weighting method. Generally speaking, the average is to add up all the numbers and divide them by the total. Expressed as: (p1+P2+P3+..+PN)/N. However, some data records have some identical data. When calculating, when a number has several identical numbers, multiply this number by several. This number is called weight and weighting, which is multiplied by a few and then added. The average is still divided by the total.