An analyst gathered the following information about a common stock investment. The stock does not pay a dividend. The money-weighted and time-weighted rates of return on the investment are closest to: Date Amount Stock purchase 1 15 January 2006 €86 Stock purchase 2 15 January 2007 €94 Stock sale (2@106) 15 January 2008 €212 A) Money-weighted rate of return is 11.02% and Time-weighted rate of return is 8.53% B) Money-weighted rate of return is 11.02% and Time-weighted rate of return is 11.029% C) Money-weighted rate of return is 11.60% and Time-weighted rate of return is 11.02%
An analyst gathered the following information about a common stock investment. The stock does not pay a dividend. The money-weighted and time-weighted rates of return on the investment are closest to: Date Amount Stock purchase 1 15 January 2006 €86 Stock purchase 2 15 January 2007 €94 Stock sale (2@106) 15 January 2008 €212 A) Money-weighted rate of return is 11.02% and Time-weighted rate of return is 8.53% B) Money-weighted rate of return is 11.02% and Time-weighted rate of return is 11.029% C) Money-weighted rate of return is 11.60% and Time-weighted rate of return is 11.02%
Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 26P
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Question
An analyst gathered the following information about a common stock investment. The stock does not pay a dividend. The money-weighted and time-weighted rates of
Date | Amount | ||
Stock purchase 1 | 15 January 2006 | €86 | |
Stock purchase 2 | 15 January 2007 | €94 | |
Stock sale (2@106) | 15 January 2008 | €212 |
A) Money-weighted
B) Money-weighted rate of return is 11.02% and Time-weighted rate of return is 11.029%
C) Money-weighted rate of return is 11.60% and Time-weighted rate of return is 11.02%
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