revious year t by investor beginning of year urn for the year s or (loss) investor of year 1 0 100 100 -50% -50 0 50 2 50 950 1000 35% 350 -350 1000 3 1000 0 1000 27% 270 0 1270 4 1270 230 1500 10% 150 -150 1500 5 1500 0 1500 20% 300 -1800 0

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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1) John made the following investments in Stock A. Calculate his money-weighted return earned over the 5-
year period. The cost of equity for Stock A is 10% p.a.
Balance from previous year
New investment by investor
Net balance at beginning of year
Investment return for the year
Investment gains or (loss)
Withdrawal by investor
Balance at end of year
1
0
100
100
-50%
-50
0
50
2
50
950
1000
35%
350
-350
1000
3
1000
0
1000
27%
270
0
1270
4
1270
230
1500
10%
150
-150
1500
5
1500
0
1500
20%
300
-1800
0
Transcribed Image Text:1) John made the following investments in Stock A. Calculate his money-weighted return earned over the 5- year period. The cost of equity for Stock A is 10% p.a. Balance from previous year New investment by investor Net balance at beginning of year Investment return for the year Investment gains or (loss) Withdrawal by investor Balance at end of year 1 0 100 100 -50% -50 0 50 2 50 950 1000 35% 350 -350 1000 3 1000 0 1000 27% 270 0 1270 4 1270 230 1500 10% 150 -150 1500 5 1500 0 1500 20% 300 -1800 0
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