XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $4 Year 2018 2019 2020 2021 An investor buys five shares of XYZ at the beginning of 2018, buys another three 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 $ 132 147 120 125 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 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.) 01/01/2018 01/01/2019 01/01/2020 01/01/2021 % % Cash Flow
XYZ stock price and dividend history are as follows: Dividend Paid at Year-End $4 Year 2018 2019 2020 2021 An investor buys five shares of XYZ at the beginning of 2018, buys another three 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 $ 132 147 120 125 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 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.) 01/01/2018 01/01/2019 01/01/2020 01/01/2021 % % Cash Flow
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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Transcribed Image Text:XYZ 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
$ 132
147
120
125
An investor buys five shares of XYZ at the beginning of 2018, buys another three 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.
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.)
%
%
Cash Flow
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