An investment fund had a starting value of 20,000 on the 1st March 2010. A net cash flow of 2,000 was received on the 1st March 2011, 1st March 2012 and 1st March 2013 respectively. Just prior to the receipt of the net cash flows on the 1st March each year the fund values were 25,000, 35,000 and 40,000 respectively. The value of the fund on the 1st March 2014 was 30,000. (1) Calculate the annual effective money-weighted rate of return earned on the fund over the period 1st March 2010 to 1st March 2014. [3] (ii) Calculate the annual effective time-weighed rate of return earned on the fund over the period 1st March 2010 to 1st March 2014. [3] (iii) Explain why there is a difference in the rates of return calculated in parts (i) and (ii) above. [4] 1