A two-for-one split should not halve a portfolio's wealth, a dividend should not be counted twice, and a bankrupt company should not disappear from the historical opportunity set. These three requirements connect data preparation directly to portfolio economics. This lesson extends point-in-time data from information versions to instrument lifecycles and supplies the accounting checks needed by an economic backtest.
Learning objectives. By the end of this note you should be able to:
- reconcile split-adjusted share counts with raw prices;
- calculate a total return including a cash distribution;
- distinguish an adjusted research series from executable prices;
- preserve historical membership and terminal outcomes;
- audit a dataset containing splits, dividends and delistings.
In this lesson
- Preserve wealth through a split
- Dividends belong in the economic return
- Research series and execution series serve different jobs
- Survivorship is selection using the future
- Historical universe and lifecycle rules
- Topic assessment: a contaminated equity table
Before you start
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