Calculate the time-weighted geometric average return

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Question - 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 $175 Buy 3 shares

1 205 Sell 1 share

2 205 Sell 1 share

3 205 Sell 1 share

a. Calculate the time-weighted geometric average return on this "portfolio."

b. Calculate the time-weighted arithmetic average return on this portfolio.

c. Calculate the dollar-weighted average return on this portfolio.

Reference no: EM132944257

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