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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
XYZ stock price and dividend history are as follows:
|
Year |
Beginning-of-Year Price |
Dividend Paid at Year-End |
|
2010 |
$100 |
$4 |
|
2011 |
$110 |
$4 |
|
2012 |
$ 90 |
$4 |
|
2013 |
$ 95 |
$4 |
An investor buys three shares of XYZ at the beginning of 2010, buys another two shares at the beginning of 2011, sells one share at the beginning of 2012, and sells all four remaining shares at the beginning of 2013. (LO 5-1)
What are the arithmetic and geometric average time-weighted rates of return for the
investor?
What is the dollar-weighted rate of return? ( Hint: Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2010, to January 1, 2013. If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.)
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