Question
XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2007 $ 340 $ 6 2008 $ 350 $
XYZ stock price and dividend history are as follows: |
Year | Beginning-of-Year Price | Dividend Paid at Year-End |
2007 | $ 340 | $ 6 |
2008 | $ 350 | $ 6 |
2009 | $ 330 | $ 6 |
2010 | $ 335 | $ 6 |
An investor buys 3 shares of XYZ at the beginning of 2007, buys another 2 shares at the beginning of 2008, sells 1 share at the beginning of 2009, and sells all 4 remaining shares at the beginning of 2010. |
Requirement 1: |
What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your answers to 2 decimal places. Omit the "%" sign in your response.) |
Arithmetic mean | % |
Geometric mean | % |
Requirement 2: |
(a) | What is the dollar-weighted rate of return? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places. Omit the "%" sign in your response.) |
Rate of return | % |
(b) | Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2007, to January 1, 2010. (Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.) |
Year | Cash flow |
2007 | $ |
2008 | $ |
2009 | $ |
2010 | $ |
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