ESSENTIALS OF INVESTMENTS>LL<+CONNECT
ESSENTIALS OF INVESTMENTS>LL<+CONNECT
11th Edition
ISBN: 9781264001026
Author: Bodie
Publisher: MCG
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Chapter 18, Problem 6PS
Summary Introduction

(a)

To calculate:

Arithmetic and geometric average time-weighted rates of return for the investor

Introduction:

Arithmetic return:

An average return of the total years of investment is known as an arithmetic return.

Annual geometric return:

It means a return on investment which shows that how much return investor has earned every year over a period of investment.

Summary Introduction

(b)

To calculate:

The dollar-weighted rate of return.

Introduction:

Dollar-weighted return:

A return on portfolio or investment which also consider the timing of flows is known as a dollar-weighted return.

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Dividend disocunt model (DDM); Author: Edspira;https://www.youtube.com/watch?v=TlH3_iOHX3s;License: Standard YouTube License, CC-BY