XYZs stock price and dividend history are as follows: An investor buys three shares of XYZ at

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XYZ’s stock price and dividend history are as follows:

Year 2019 2020 2021 2022 Beginning-of-Year Price $100 120 90 100 Dividend Paid at Year-End $4 4 4 4

An investor buys three shares of XYZ at the beginning of 2019, buys another two shares at the beginning of 2020, sells one share at the beginning of 2021, and sells all four remaining shares at the beginning of 2022.

a. What are the arithmetic and geometric average time-weighted rates of return for the investor?

b. What is the dollar-weighted rate of return?

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ISE Essentials Of Investments

ISBN: 9781265450090

12th International Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus

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Question Posted: Nov 22, 2023 03:12 AM

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XYZs stock price and dividend history are as follows: An investor buys three shares of XYZ at

Question:

Year 2019 2020 2021 2022 Beginning-of-Year Price $100 120 90 100 Dividend Paid at Year-End $4 4 4 4

Step by Step Answer:

a Arithmetic and geometric average timeweighted rates of return Arithmetic average timeweighted rate of return To calculate the arithmetic average tim...View the full answer

ISE Essentials Of Investments

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