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There is no single best way of modeling time series. Taking or not taking logs is a modeling question. The answer in general depends on either your belief about the structure of the data set or some model selection method (the one that you believe in) or maybe something else. That being said, the usual way to go is to take logs and apply (G)ARCH on the log-...


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If you calculate (1+r1)*(1+r2)-1 = 11.1435% that gives you the TWR (Time Weighted Return) which is one widely used measure of return. It treats all periods equally, no matter the assets involved. I am not familiar with the calculation you do in B17 and C18. If I compute the IRR (internal rate of return) for the cash flows [-1000,-20000,+25810] I get 21.65%...


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