Calculation of 1, 3, 5, 10 yr yields

[Exspextations]

I have held one investment since 1997 and, after adding it to my Fund Manager portfolio imported the historic prices downloaded from Yahoo Finance. While the historic prices go back to the date the investment was purchased they are only available monthly before July 2012 and this seems to prevent the calculation of the 3,5 and 10 yr yields as these are shown as 'NA'. Is there any way that these yields can be calculated based upon the monthly data - this would be helpful as I have several other investments with the same problem?

Thanks in advance

[Mark]

Hi Exspextations,

Yes, you can increase the allowed amount of "interpolation" for pricing data. By default, it will only span 3 days, but you can change it to something like 31 if you have only monthly data, and you want it to use that. See "Options / Yield Interpolation Range..." and next to "Enforce maximum interpolation range" set it to 31.

[Exspextations]

Thanks for the tip - increased nr. days to 31 and now have yields all the way back to date of purchase. What is the difference between linear and step interpolation - this seems to have a subtle effect on the yields, but I could not find any help on the effect of these two options and when they should be used?

Thanks

[Mark]

Hi Exspextations,

The Linear/Step options control how a price in interpolated between 2 surrounding prices. In the Step case, the interpolated price is the same as the earlier price. In the Linear case, a straight line is drawn between the 2 surrounding prices, and the price from that line is used. Here is an example:

Say you need a price for May 15, but you only have May 1 and May 30 prices recorded, such as:

May 1 Price: $10
May 30 Price: $20

May 15 Step Interpolated: $10
May 15 Linear Interpolated: $15

You can read more details in the online documentation:

http://fundmanagersoftware.com/help/yie ... range.html

[Exspextations]

Mark,

Thanks for the clarification - very helpful.

Martin