cash deposits

[lvs]

Hi Mark,
What type of MM transaction is cash deposit (a client added new money to his portfolio)?
I entered it as a "purchase" but my manually calculated return doesn't match the return number produced by the FM software.
Fyi, my returns match those of the FM's for the months where there was no cash contributions.

[Mark]

Hi lvs,

This would just be a buy into your cash account. You buy at $1 per share, and keep the share price also fixed at $1. If you look at how this affects the ROI yield equation, the "Ending value" would go up by the amount of the deposit, and you would also have a new "inv(1 + i)^term" entry. If you look at the yield right after you deposit the money, this will have no effect on the yield, as the new term effectively cancels out the increase in ending value. See:

http://www.fundmanagersoftware.com/help/yields_roi.html