Question
A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and
A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and the price history of the stock are summarized below. The stock pays no dividends.
| Time | Price | Action | |||||||||
| 0 | $ | 190 | Buy 3 shares | ||||||||
| 1 | 200 | Sell 1 share | |||||||||
| 2 | 200 | Sell 1 share | |||||||||
| 3 | 200 | Sell 1 share | |||||||||
a. Calculate the time-weighted geometric average return on this portfolio.
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Mathematics Of Finance
Authors: Robert Brown, Petr Zima
2nd Edition
0071756051, 9780071756051
