Talk:Public Market Equivalent

Please check for possible error

This all looks excellent but I cannot recreate the first reference to the 7.77% IRR. Can you tell me how you get it? Thanks.173.58.230.48 (talk) 20:29, 14 November 2014 (UTC)

Checked and this seems to be correct

You can reproduce this 7.77% by entering in excel =IRR(-100,-50,60,100,20) Yoqtan (talk) 15:39, 14 December 2014 (UTC)

reply to your reply

It seems that someone is now adding another period to the IRR from the prior example, yet are not showing what happened to the index in that extra period. I thought that the final 'cash flow' is distributed proceeds plus NAV. If so, I would expect that the IRR result would be the same as the 8.13% in the prior example - and you get 8.13% by only having four, not 5, cash flows, with the 4th one being the 120. I thought the point of the example was not to add another period but, rather, to change the index return in one of the periods, so as to make a NAV go negative. And then to show how the PME+ would deal with it. Forgive me if I am missing something. Thanks.

ok

Hello unknown user, I see what you mean. Between the two PME examples, we're adding a period and that can be confusing. I changed the first example so that everything is on 5 periods, with the valuation having its own period. I also changed the KS-PME and direct alpha examples for consistency Yoqtan (talk) 15:37, 24 March 2015 (UTC)

More errors

Forgive me for saying this, but I think this work is sloppy. Part of the problem may be that you sometimes don't show enough decimal places (you should), but I don't think that is much of it.

For the 2nd PME example, I get an ending value of -5.47, not -5.69. For the PME-plus example, I think the PME investment ends with $19.20, not $20. For the mPME example, I get an IRR of 2.02%, not minus 0.11%. Part of the reason is as follows: We agree that the next to last modified NAV is about $13.01. If so, how do you manage to get a final modified NAV of $8, when the last period return is +20%. I get about 13.01 x 1.2 = $15.61.

Please check all your math. If you can, somehow, post an EXCEL file, I suspect I can help find the errors. — Preceding unsigned comment added by 108.0.236.125 (talk) 04:54, 26 March 2015 (UTC)

Happy to have such assiduous readers :-). In some of the calculation, I was taking 125 as the final value instead of 120. Corrected that, thank you for spotting it. I don't think there is a way to attach an excel file ? (is there ? ) Yoqtan (talk) 14:20, 11 April 2015 (UTC)