Concept explainers
(A)
To calculate:
Arithmetic and Geometric average time weighted average return for the investor
Introduction:
Arithmetic average return refers to the return ascertained on the investment. It can be computed by adding returns ascertained for the sub periods and dividing the same by total number of periods. Geometric average return which is also known as Geometric mean return is used primarily for the investment that is required to be compounded.
(B)
To calculate:
Dollar weighted
Introduction
Dollar weighted rate of return refers to the method through which portfolio return can be calculated that takes into consideration total dollar values at end and beginning of the investment including
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Loose-Leaf Essentials of Investments
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