In a previous post I covered how to calculate standard deviation using the TI BA II Plus calculator; in a more recent post I covered how this calculation could be done on the HP 12C calculator. CIPM candidates should also keep in mind that those methods can be used to calculate tracking error. For example, […]
Read More CIPM, CIPM Expert, CIPM Principles, downside deviation, performance measurement, risk measurement, semi-deviation, standard deviation, statistics, tracking errorOccasionally, when teaching our classes, I get a question along the lines of, “Can you explain what the Sharpe Ratio is, in 100 words or less?” Here’s what I say (I’ll try to be concise, but it may be over 100 words… You could have chosen to invest without taking risk by investing in the […]
Read More CIPM, CIPM Expert, CIPM Principles, John D. Simpson, performance appraisal, performance measurement, risk measurement, risk-adjusted performance, Sharpe ratio, standard deviation, The Spaulding GroupA couple of CIPM candidates have contacted me recently asking for an explanation of one of the exhibits in the CIPM Principles Level curriculum that deals with the subjects of stated annual rates and effective annual rates. That exhibit (Reading 4, Exhibit 3) shows a set of “equivalent effective annual rates of return” at different […]
Read More CIPM, CIPM Expert, CIPM Principles, earned annual rate, effective annual rate, interest rates, John D. Simpson, performance measurement, rates of return, stated annual rate, The Spaulding Group, yieldsIn a previous blog post, I covered how one can make use of the statistics worksheet on the TI BA II Plus calculator to calculate standard deviation. In today’s post, I will cover the keystrokes for doing this on the statistics calculator on the HP 12C calculator. CIPM candidates are required to be able to […]
Read More CFA, CIPM, CIPM Expert, CIPM Principles, GIPS, HP 12C, John D. Simpson, performance measurement, risk measurement, standard deviation, statistics, The Spaulding Group, tracking errorReaders of my blog at the former location may remember that I covered this subject in a previous post… somehow that post did not get converted to the new location of the blog on this website, so I am re-addressing the subject here. Thus, most of the content is from the post on the previous […]
Read More CIPM, CIPM Expert, CIPM Principles, CIPM Program, GIPS, internal rate of return, IRR, John D. Simpson, money-weighted return, rate of return, return calculations, SI-IRR, since-inception internal rate of return, The Spaulding Group, time-weighted return, TWROccasionally when I am doing GIPS verifications, I come across situations where a firm has a fixed-life, fixed-commitment investment vehicle that they want to present performance for in compliance with the GIPS standards. Because the firm controls the external cash flows (in the form of capital calls), they want to follow the private equity provisions […]
Read More CIPM, CIPM Expert, CIPM Principles, external cash flows, GIPS, internal rate of return, performance measurement, private equity, rate of return, real estate, SI-IRR, TWRWhat’s new with the GIPS standards? CIPM Candidates should tune in to a webinar we’re hosting on February 5 @ 11:00 AM EST: What’s New With the GIPS Standards? While this webinar will not focus the CIPM Program, GIPS is, of course a significant part of the curriculum, and I believe there is likely to […]
Read More CFA Institute, CIPM, CIPM Expert, CIPM Principles, GIPS, GIPS interpretationsIn a previous post I introduced two forms of the differential return equation that are included in the CIPM curriculum at the Principles Level: differential return using standard deviation differential return using beta If it seems that the differential return formula is just another confusing formula to memorize, it may help to recognize that the […]
Read More beta, CIPM, CIPM Principles, differential return, Jensen's alpha, performance measurementDifferential return is a risk-adjusted performance measure that many CIPM candidates have not see before, and as a result, I get a lot of questions asking what exactly is the differential return… what does it mean and how should it be interpreted. Thus, I have decided to focus on this measure in a series of […]
Read More beta, CIPM, CIPM Principles, differential return, performance measurement, risk, risk adjusted performance measure, risk adjusted return, risk measurement, Sharpe ratio, standard deviation, subtraction alpha, Treynor ratioIt’s that time of year again… the Autumn window for the CIPM Program is well underway, and examinations will be coming up soon in October! Just a reminder – I will be teaching our CIPM Principles Level and Expert Level Preparatory classes in Chicago this month! The schedule is: CIPM Principles: August 18-19, 2014 – […]
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