What was your time-weighted rate of return for the year

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Reference no: EM131991133

Your grandmother gives you $4000 for your birthday, which you invest in a mutual fund on January 1. On June 1, your fund balance is $7800, and you then deposit $1200 (which you received for your high school graduation). On the following January 1, you calculate that your dollar-weighted rate of return (using simple interest) for the year was 29.1%. What was your time-weighted rate of return for the year?

(Hint: Use the dollar-weighted yield simple interest approximation with i_{dw} = 0.291 to find the balance at the end of the year, and then use this balance to set up the time-weighted yield equation. After you find the balance, the time-weighted yield is just a standard time-weighted yield equation.)

Answer = %

Reference no: EM131991133

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