How to calculate the rate of the return of portfolio? I should use the total profits in transaction divided by the total investment or weighted average method? Besides, I need to compare the rate of return of my portfolio with the market rate of return. I shouldn't use the r=Rf+B(Rm-Rf) right? Is this equation based on the equilibrium status? I want to get the market rate of return. Does it come from some index like S&P 500? But I also don't know how to find this number from S&P 500. Is this market rate stable or changeable day by day? I thought it should be changeable since S&P is a big stock portfolio as well. The total rate is going to change with the performance of the stock in S & P500? Plz give me some help. Thanks a lot !!! Geez. What the hell are you asking here?!? The market rate is Rm. The risk free rate (government t-bills) is Rf. B stands for beta, which basically means risk.
The market rate of return is usually given when you're doing your finance homework. If you want to figure out what the return is on the S&P 500, you can look it up online. Just go to bigcharts.com and type in sp500. The return is based on the time period you're looking at. For example, you may want to look at a 1-day return, 1-month, 1-year, etc. |
