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.) Answer is complete and correct. Arithmetic average rate of return Geometric average rate of return 4.94 % 2.92 % 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 error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.) Answer is complete but not entirely correct. Dollar-weighted rate of return (0.2926) O %

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Author:Erwin Kreyszig
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Chapter2: Second-order Linear Odes
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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.)
Answer is complete and correct.
Arithmetic average rate of return
Geometric average rate of retum
4.94
%
2.92
%
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 error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a
minus sign.)
Answer is complete but not entirely correct.
Dollar-weighted rate of return
(0.2926) O %
Transcribed Image Text: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.) Answer is complete and correct. Arithmetic average rate of return Geometric average rate of retum 4.94 % 2.92 % 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 error.) (Round your answer to 4 decimal places. Negative amount should be indicated by a minus sign.) Answer is complete but not entirely correct. Dollar-weighted rate of return (0.2926) O %
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