Talk:Rate of return

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Total Returns[edit]

Could somebody justify or cite a source for the definition of Total Returns that is given on this page? The way the Reinvestment Factor is used here, your returns are going to be too strongly affected by the final period's Distribution--make that zero, and that undermines distributions from all other years.

I believe it makes more sense to simply multiply successive Reinvestment Factors rather than adding 1 after multiplying with Di/Pi. Morningstar, Inc. takes this approach, as can be seen on page 19 of the document called "Morningstar Rating™ for Funds Methodology", which can be found here.

I couldn't find any useful results for the term Reinvestment Factor on Google search except those that leech from this Wikipedia page. So if this is wrong, it had better be checked soon because it's propagating everywhere. The next formula on the page (Annual Average Geometric Return, as required by SEC) makes perfect sense.

-Ankurtg (talk) 06:07, 14 July 2010 (UTC)

I rewrote this section a while back.Jonathan G. G. Lewis 12:50, 23 August 2014 (UTC)

Foreign currency return[edit]

I have added new sections on foreign currency returns.--Jonathan G. G. Lewis 08:35, 2 February 2016 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs) Another editor added a line saying that the return on a US dollar deposit measured in Japanese yen terms was the return experienced by an investor who first converts yen into US dollars at the beginning, and converts the US dollars back into yen at the end. While this is certainly true, it also still true that the US dollars return 12.2% in yen terms, without conversion back and forth. This was the original point I was making in this section. The fact that the investment is denominated in US dollars, not yen, does not alter the return in yen terms. --Jonathan G. G. Lewis 10:33, 4 February 2017 (UTC) — Preceding unsigned comment added by Jonazo (talkcontribs)