2. The annual rate of return is the ratio of the actual income of an investment for one year.
The annualized rate of return is the return of investment (commonly used by money funds) over a period of time (for example, 7 days). Assuming that the year is at this level, the annual rate of return is converted. Because the annualized rate of return is variable, the annualized rate of return is not necessarily the same as the annualized rate of return.
3. Under different ways of income carry-over, the calculation formula of seven-day annualized rate of return should also be different. At present, there are two ways to carry forward the income of money market funds. One is to pay dividends on a daily basis and carry them forward on a monthly basis, which is equivalent to daily simple interest and monthly compound interest; The other is daily dividend, which is carried forward by the day and is equivalent to daily compound interest, in which the formula for simple interest is (∑ ri/7) × 365/10000×100%, and the formula for compound interest is: (∏ (1+ri//. Ri is the income per 10,000 shares on the latest I Gregorian calendar day (I =1,2 ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
It can be seen that the 7-day annualized rate of return is calculated according to the 7-day income, and the 30-day annualized rate of return is calculated according to the recent 1 month income.
Extended data
One-off investment. Suppose an investor invests the principal C in a market (such as the stock market) at a certain moment, and its market value becomes V after a period of time T, then the investor's income (or loss, if V <: C) is P=V-C, and its rate of return (that is, absolute rate of return, hereinafter referred to as rate of return) is K=P/C=(V-C)/C=V/C- 1, and assuming that all effective investment time in one year is d, the number of times investors can make repeated investments in one year is N=D/T, Then the annualized rate of return of this investment can be expressed as: y = (1+k) n-1= (1+k) (d/t)-1or y = (v/c) n-/kloc.
Here, the effective investment time d of one year varies with different markets. Like bank deposits, bills, bonds, etc., interest is generally calculated at 360 days (or 365 days in rare cases) every year, that is, D=360 days. In publicly traded markets such as stocks and futures, the effective investment time is the number of trading days in a year, which is about 250 days after deducting holidays (52 weeks a year, 5 trading days a week, about 10 days a year: 52×5- 10=250), that is, D=250 days.
For real estate, general business, industry, etc., because it can be bought, sold or opened every day, it is not affected by holidays, so the effective investment time is the natural number of days in a year, that is, D=365 days. Very special circumstances such as one day extra in individual years caused by leap years can naturally be ignored because of its small impact.
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