Mr. David Miller, a retiree residing in Ontario, uses a portfolio manager to manage his CAD 1.5 million investment portfolio. The portfolio started with CAD 1,500,000 on January 1st. On June 30th, he made a contribution of CAD 50,000, and the portfolio value before the contribution was CAD 1,550,000. On December 31st, the portfolio value was CAD 1,650,000. Calculate the MWRR for the year (annualized).

Question: Mr. David Miller, a retiree residing in Ontario, uses a portfolio manager to manage his CAD 1.5 million investment portfolio. The portfolio started with CAD 1,500,000 on January 1st. On June 30th, he made a contribution of CAD 50,000, and the portfolio value before the contribution was CAD 1,550,000. On December 31st, the portfolio value was CAD 1,650,000. Calculate the MWRR for the year (annualized).

Answer options:

• 9.33% ✅ 8.67%
• 10.00%
• 9.50%

Correct answer: 8.67%

Explanation: To calculate the MWRR, we need to find the discount rate that equates the present value of all cash flows (initial investment, contributions, withdrawals, and ending value) to zero. This is an iterative process. For a simplified calculation, we can consider the internal rate of return (IRR). Initial Investment: -1,500,000 (at t=0). Contribution: -50,000 (at t=0.5). Ending Value: +1,650,000 (at t=1). Solving for IRR gives approximately 8.67%.