Calculate the time-weighted geometric average return on

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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

100

Sell 1 share

2

100

Sell 1 share

3

100

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: EM13567288

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