Question
A manager buys three shares of stock today, and then sells one of those shares each...
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 | $ | 90 | Buy 3 shares | ||||||||
| 1 | 110 | Sell 1 share | |||||||||
| 2 | 110 | Sell 1 share | |||||||||
| 3 | 110 | 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.)
b. Calculate the time-weighted arithmetic average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
c. Calculate the dollar-weighted average return on this portfolio. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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