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The system wide annualization methods for annualizing returns include the following:
A description of each method follows.
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| A performance system parameter, Sys Item 8, (SYS_ITEM) stores the value that determines the annualization option to use across the system. The SYS_ITEM has a default value of Months. See Numerator for Annualization Based on Days for examples. |
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When annualizing based on days, instead of hard coding the numerator of the annualization factor to 365, the performance system parameter, Sys Item 9, (SYS_ITEM) called stores a number to use instead of 365. This setting applies to the Days method only.
To configure the numerator, the SYS_ITEM stores the value that determines the numerator for annualization based on days to use across the system. To support backwards compatibility, the SYS_ITEM is scripted to 365 in upgrade and installation scripts.
Examples of each annualization method follow. See are shown in the following three figures.
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