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Question 1 (a) An investor purchased share of Solar Corp on 1 Jan 2016 and held the investment until 31 December 2020. Details of Solar
Question 1 (a) An investor purchased share of Solar Corp on 1 Jan 2016 and held the investment until 31 December 2020. Details of Solar Corp's share price and dividend payout during the period of investment are as follows: Date Dividend ($) 01 Jan 2016 31 Dec2016 31 Dec 2017 31 Dec 2018 31 Dec 2019 31 Dec 2020 Share price ($) 12.50 13.00 13.70 12.90 13.50 14.10 0.30 0.35 0.20 0.30 0.35 Compute: (1) Arithmetic rate of return for 2016, 2017, 2018, 2019 and 2020 separately. (5 marks) (ii) Geometric average rate of return for the entire period of investment from 2016 until 2020. (5 marks) (iii) Logarithmic returns for the entire period of investment from 2016 until 2020. (2 marks)
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