XYZ stock price and dividend history are as follows: Beginning-of- $ 104 Year 2018 Year Price Dividend Paid at Year-End $ 2 2020 2021 115 90 105 2 2 2 2019 An investor buys three shares of XYZ at the beginning of 2018, buys another one s the beginning of 2020, and sells all three remaining shares at the beginning of 202 Required: a. What are the arithmetic and geometric average time-weighted rates of return for calculations. Round your answers to 2 decimal places.) Arithmetic time-weighted average returns Geometric time-weighted average returns % %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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XYZ stock price and dividend history are as follows:
Beginning-of-
$ 104
Year
2018
Year Price
2019
2020
2021
115
90
105
Dividend Paid at
Year-End
$ 2
2
2
2
An investor buys three shares of XYZ at the beginning of 2018, buys another one shares at the beginning of 2019, sells one share at
the beginning of 2020, and sells all three remaining shares at the beginning of 2021.
Required:
a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate
calculations. Round your answers to 2 decimal places.)
Arithmetic time-weighted average returns
Geometric time-weighted average returns
%
%
b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021.
(Negative amounts should be indicated by a minus sign.)
Date
Cash Flow
01/01/2018
01/01/2019
01/01/2020
01/01/2021
Transcribed Image Text:XYZ stock price and dividend history are as follows: Beginning-of- $ 104 Year 2018 Year Price 2019 2020 2021 115 90 105 Dividend Paid at Year-End $ 2 2 2 2 An investor buys three shares of XYZ at the beginning of 2018, buys another one shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all three remaining shares at the beginning of 2021. Required: a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Arithmetic time-weighted average returns Geometric time-weighted average returns % % b-1. Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2018, to January 1, 2021. (Negative amounts should be indicated by a minus sign.) Date Cash Flow 01/01/2018 01/01/2019 01/01/2020 01/01/2021
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