Suppose that you started with a $1,000 investment budget, earned $200 in the quarter, lost $100 in

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Suppose that you started with a $1,000 investment budget, earned $200 in the quarter, lost

$100 in the second quarter, earned $50 in the third quarter, and lost $150 in the fourth quarter.

a. What would be your total rate of return using the arithmetic mean?

b. What would be your total return using the time-weighted rate of return?

c. What conclusion can you draw and why?

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