How to Calculate the Dollar Weighted Average Return
Channel: Jonathan Kalodimos, PhD
Date: 2023-01-13

In this video I walk you through calculating the dollar-weighted average return of an investment. The underlying concept is very similar to the internal rate of return (IRR) concept in corporate finance. The example is as follows:

Suppose you invest $1,000 at the beginning of the year for the next three years. The returns over that period are 10%, -3%, and 6%. What is your dollar-weighted average return?