An investment fund contains £100,000 at time zero. After six months its value has grown to £105,000 and further £10,000 are added. At the end of the year the fund is worth £125,000. In the first six months of the second year its value grows to £126,000 and at the end of the year it is worth £128,000. At that point £50,000 are withdrawn. At the end of the following six months the fund’s value is £80,000 and the fund is liquidated a)In which semester did the fund have its best performance? (To avoid any confusion we notice that a ‘semester’ is a 6-month period.) b)Compute the time-weighted rate of return per semester.
An investment fund contains £100,000 at time zero. After six months its value has grown to £105,000 and further £10,000 are added. At the end of the year the fund is worth £125,000. In the first six months of the second year its value grows to £126,000 and at the end of the year it is worth £128,000. At that point £50,000 are withdrawn. At the end of the following six months the fund’s value is £80,000 and the fund is liquidated a)In which semester did the fund have its best performance? (To avoid any confusion we notice that a ‘semester’ is a 6-month period.) b)Compute the time-weighted rate of return per semester.
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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An investment fund contains £100,000 at time zero. After six months its value has grown to £105,000 and further £10,000 are added. At the end of the year the fund is worth £125,000. In the first six months of the second year its value grows to £126,000 and at the end of the year it is worth £128,000. At that point £50,000 are withdrawn. At the end of the following six months the fund’s value is £80,000 and the fund is liquidated
a)In which semester did the fund have its best performance? (To avoid any confusion we notice that a ‘semester’ is a 6-month period.)
b)Compute the time-weighted
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