Sequel to “partitioning transaction vectors into pure investments”: A new sufficient condition for transactions to have a unique IRR and some results on the distribution of IRRs

Abstract

An article by the same author in The Engineering Economist in 2018 (vol. 63(2), 143–157) proved that any transaction could be uniquely partitioned into a sequence of pure investments with strictly decreasing internal rates of return (IRRs). This article uses that result to prove a new condition for a transaction to have a unique IRR and also gives some information on how the IRRs of a transaction must be distributed.

Acknowledgments

I am very grateful to Carlo Alberto Magni for helpful comments during the research which led to the preparation of this paper.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Notes on contributors

James Rutherford Cuthbert

Dr. James Rutherford Cuthbert joined the United Kingdom Civil Service after taking his D.Phil. in probability theory at Sussex University and lecturing in statistics at Glasgow University. He worked in the Treasury and the Scottish Office and was latterly Scottish Office Chief Statistician. His research interests include the theory of purchasing power parities, investment theory, and public finance.