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How Reinvestment Rates Affect Realized Return
Gup, Benton E.
17/2  (Winter 1974): 91-92

Discusses the effects of various reinvestment rates on the realized return of the investors showing that in order to obtain a particular internal rate of return, the stream of cash flows from the investment must be reinvested at the same rate. Dependence of the difference between the internal rate of return and realized return on the level of the reinvestment rate and the maturity of the investment.

 

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