In: Finance
A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and the price history of the stock are summarized below. The stock pays no dividends.
time | price | action |
0 | $110 | Buy 3 shares |
1 | $120 |
Sell 1 share |
2 | $120 | Sell 1 share |
3 | $120 | Sell 1 share |
a. Calculate the time-weighted geometric average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Geometric Average Return | % |
b. Calculate the time-weighted arithmetic average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Arithmetic average return | % |
c. Calculate the dollar-weighted average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Dollar- weighted average return | % |