1. Suppose that a person bought 1000 shares of company X for 20 euros per share on 01.01.2018. The commission fee charged on this transaction was 40 euros. This person kept these stocks for 3 years and sold his portfolio of company X stocks on 01.01.2021 for 30 euros per share. The commission fee charged on this transaction was 60 euros. During the holding period the investor received dividends 1 euro per share on 01.01.2019, dividends 1 euro per share on 01.01.2020 and dividends 2 euros per share on 01.01.2021.

Suppose that the realized capital gains are taxed at 20% and the dividends are tax exempt in the country of residence of this person. Suppose also that the annual rate of inflation in the country of residence of this person was 4% in 2018, 4% in 2019 and 4% in 2020.

a) Find the nominal after-tax holding period rate of return for this person from the investment described.

b) Find the real after-tax holding period rate of return for this person from the investment described.