Solution-Geometric average annual return

Geometric average annual return

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Reference no: EM133058570

Suppose you purchased one share of ABC at the end of 2017 for $55. At the end of 2018, you received a dividend of $2 and the price of the share was $52. You bought another share of ABC at the end of 2108. At the end of 2019 you received total dividends of $6 ($3 for each share) and sold both shares at $55.50 per share.

The geometric average annual return and the dollar weighted annual return on your investment for the two-year period of 2018 and 2019 are

-35.22% and 38.47%

-3.35% and 5.38%

-4.12% and 7.96%

-5.10% and 7.32%

-None of the answers are correct

Reference no: EM133058570

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Geometric average annual return

Reference no: EM133058570

Reference no: EM133058570

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