Question

what is the time weighted of return?

C) 14.94% 73 An investor buys one share of a stock at $85 at t = 0. He buys an additional share for $90 at t = 1. The stock pays a dividend of $5 per share at t = 1 and t = 2. The investor sells both the shares at t = 2 for $100 each. Which of the following is most likely the time weighted rate of return? A) 11.34%. B) 14.18%. c) 14.94%.

Answer 1

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90 94 projects (Autosaved) (Autosaved) (Autosaved) - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins - 2x % Cut Σ AutoSum : A Calibri 11 A A = = = V Wrap Text General Ea Copy Fill 2 Paste BI U DA * SF *Merge & Center - Merge Center $ % % 4:0 .00 Format Painter 8. Conditional Format Cell Insert Delete Format Sort & Find & Formatting as Table Styles 2 Clear Filter Select Clipboard Font Alignment Number Styles Cells Editing KN103 for KH KIK KK KLKM KN KO KPKQ KR KSKT KU KV 88 89 TIME WEIGHTED RETURN 91 92 YEAR PRICE DIVIDEND RETURN 93 0 85 95 90 5 11.76% [(90+5-85)/85] 96 100 5 16.67% (100+5-90)/90] 97 98 TIME WEIGHTED RETURN = ((1+r1)*(1+r2))^(1/2) - 1 99 TIME WEIGHTED RETURN = (1+0.1176)*(1+0.1667))^(1/2) - 1 100 ANS B TIME WEIGHTED RETURN = 14.18% 101 [IT IS ALSO CALLED GEOMETRIC RETURN] 102 103 104 105 106 107 108 I RRnpvbeta RATION PBP ARR invest, EAA MI-np-ir_ REPLACEMENT S HPR GMAMEAC MACRS NPV RELEVANT BETA LEVERED REPLACEMENT BOND OPTION TO WAITSTEIN III Rea ferences BOU 120% 1 + ...B 199 * 10 ENG 01-12-2019 H