XYZ stock price and dividend history are as follows:Dividend Paid atYear-End$ 4Year2018201920202021An investor buys six shares of XYZ at the beginning of 2018, buys another two shares at the beginning of2019, sells one share at the beginning of 2020, and sells all seven remaining shares at the beginning of2021.Required:a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Do notround intermediate calculations. Round your answers to 2 decimal places.)Beginning-of-Year Price$ 124135115120Arithmetic time-weighted average returnsGeometric time-weighted average returnsDateb-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.)01/01/201801/01/201901/01/202001/01/2021Rate of returnCash Flow%%b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate ofreturn, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by aminus sign. Round your answer to 4 decimal places.)%

Average Rate of Return:The average rate of return is calculated by summing up the returns over a…

XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $4 Year 2018 2019 2020 2021 An investor buys six shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all seven remaining shares at the beginning of 2021. Beginning-of- Year Price $ 124 135 115 120 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 Date 01/01/2018 01/01/2019 01/01/2020 01/01/2021 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.) 4 4 4 Rate of return Cash Flow % % b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.) %

XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $4 Year 2018 2019 2020 2021 An investor buys six shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all seven remaining shares at the beginning of 2021. Beginning-of- Year Price $ 124 135 115 120 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 Date 01/01/2018 01/01/2019 01/01/2020 01/01/2021 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.) 4 4 4 Rate of return Cash Flow % % b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus sign. Round your answer to 4 decimal places.) %

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

Problem 1PS

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es XYZ stock price and dividend history are as follows: Beginning-of-Year Dividend Paid at Year-End Price $100 110 $ 4 4 90 95 Year 2018 2019 2020 2021 An investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four 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 2018 2019 2020 2021 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 4 4 Cash Flow $ Rate of return (300) (208) 110 396 3.15 % 2.33 % b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot…
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XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2018 $ 110 $ 3 2019 113 3 2020 100 3 2021 105 3 An investor buys four shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all five 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.) 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.) b-2. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.) (Negative value should be indicated by a minus…
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XYZ's stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2018 $ 120 $ 4 2019 144 4 2020 108 4 2021 120 4 An investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four remaining shares at the beginning of 2021.a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Arithmetic average rate of return 5.31% Geometric average rate of return b. What is the dollar-weighted rate of return? (Hint: Carefully 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. If your calculator cannot calculate internal rate of return, you will have to use trial and…
XYZ's stock price and dividend history are as follows. Dividend Paid at Year-End $4 4 4 4 Year 2018 2019 2020 2021 Beginning-of-Year Price $ 138 166 124 138 4 An investor buys three shares of XYZ at the beginning of 2018, buys another two shares at the beginning of 2019, sells one share at the beginning of 2020, and sells all four remaining shares at the beginning of 2021 a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answers to 2 decimal places. Do not round other calculations.) Arithmetic average rate of return Geometric average rate of return.

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