You purchase a stock for $100 that pays an annual dividend of $5.50. At the beginning of the second year, you purchase an additional share for $130. At the end of the second year, you sell both shares for $140. Determine the dollar-weighted return and the time-weighted compounded (i.e., geometric) return on this investment. Repeat the process but assume that the second share was purchased for $110 instead of $130. Why do the rates of return differ?

Please explain how you got the first answer answer and the second one (in bold). Specially the second question marked in bold. Possible answers for the question in bold:

a. Time weighted return does not change. Dollar weighted return is now 26.2%

b. Dollar weighted return does not change. Time weighted return is now 26.2%

c. Time weighted return is now 19.3% and Dollar weighted return is now 26.2%

d. Time weighted and dollar weighted returns are now both equal to 20%