A pension portfolio manager is about to upgrade her performance calculation software. Currently, her performance software will only calculate performance on a quarterly money-weighted rate of return basis. Her results are shown below:

Quarter 1: 5.35%

Quarter 2: -2.34%

Quarter 3: 4.62%

Quarter 4: 1.25%

A Explain how you would approximate a time-weighted rate of return for the entire year.

B Determine the approximate time-weighted rate of return, showing the detail of your calculation.