Question

XYZ stock price and dividend history are as follows:

Year	Beginning-of-Year Price	Dividend Paid at Year-End
2007	$ 340	$ 6
2008	$ 350	$ 6
2009	$ 330	$ 6
2010	$ 335	$ 6

An investor buys 3 shares of XYZ at the beginning of 2007, buys another 2 shares at the beginning of 2008, sells 1 share at the beginning of 2009, and sells all 4 remaining shares at the beginning of 2010.

Requirement 1:

What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

Arithmetic mean	%
Geometric mean	%

Requirement 2:

(a)	What is the dollar-weighted rate of return? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Rate of return

%

(b)	Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2007, to January 1, 2010. (Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response.)

Year	Cash flow
2007	$
2008	$
2009	$
2010	$

Answer 1