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A portfolio manager has the following sequence of cash flows over a two-year period. Calculate the portfolio's average annual return to measure the managers performance.
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A portfolio manager has the following sequence of cash flows over a two-year period. Calculate the portfolio's average annual return to measure the managers performance.
Market Value before | Market Value after | ||
Time | cash flow | Cash In | cash flow |
0 | $0 | $3,000 | $3,000 |
1 | $3,200 | $1,950 | $5,150 |
2 | $6,000 | $90 | $5,910 |
2 $6,000 $90 $5,910
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