The Holding Period Return (HPR) Michael purchases a stock at $100 per share, receives S5 of dividends per share and later sells the stock at $125. What is his holding period return? Answer: Arithmetic (Average) Return (AR) Michael has owned a stock for three years, with the following retums: What is the arithmetic retum? Discuss the limitations Year 1: 12% Year 2.5% Year Answer: Geometric Return Michael has owned a stock for three years, with the following returns What is the pometric metu? Year: 19 Year: 5% Year: 25 Answer: The Weighted Average (Expected) Return (WAR) Keith owns the following portfolio What is the weighted average expected return of the portfolio Security Fair Market Value Expected Return S10,000 10% $15,000 $25,000 The Internal Rate of Return (IRR) Three years ago, Michael purchased a stock for $20. Past the past three years, the stock has paid the following dividends Year 1: S1.00 Year: 1.25 Year 3: SIS At the end of the third year, the stock price is $24. What is Michael's compounded rate of retum (IRR) if he sells the stock for $24? Answer 12.08 Standard Dentation The returns fortfolio Andare as follows Investment A Investment B Year ES Year 2