Rate of Returns
3
Example:
XYZ stock price and dividend history are as follows:
An investor buys three shares of XYZ at the beginning of 2010, buys another
two shares at the beginning of 2011, sells one share at the beginning of 2012,
and sells all four remaining shares at the beginning of 2013.
1.What are the arithmetic and geometric average time-weighted rates of return
for the investor?
2.What is the dollar-weighted rate of return?