What was the annual rate of return

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Reference no: EM13205037

Initial price: $10..00

Year 1

Ending value of portfolio: $10.50

Distribution: $0.30

Market return: 12%

Year 2

Ending value of portfolio: $12.00

Distribution: $1.00

Market return: 17%

Year 3

Ending value of portfolio: $11.25

Distribution: $0.50

Market return: 2%

Year 4

Ending value of portfolio: $12.50

Distribution: $1.00

Market return: -3%

Year 5

Ending value of portfolio: $14.00

Distribution: $1.00

Market return: 14%

1. For the entire 5 years, what was the dollar weighted compound annual rate of return?

2. If 100 shares @$1000 are bought at the beginning of year 1, how much did the investor have at the end of year 5, assuming all cash dividends were reinvested in the fund at the year-end values? Based on these beginning and end values, what was the annual rate of return?

3. If an individual invests $1000 at the beginning of each year, how much did the investor have in the account at the end of year 5 if cash distributions are also reinvested? (assume that the year end values are the beginning values for the subsequent year)

Reference no: EM13205037

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