Ulli Lohrmann and his wife, Suzanne Lohrmann, are planning for retirement and want to compare the past

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Ulli Lohrmann and his wife, Suzanne Lohrmann, are planning for retirement and want to compare the past performance of a few mutual funds they are considering for investment. They believe that a comparison over a five-year period would be appropriate. They gather information on a fund they are considering, the Rhein Valley Superior Fund, which is presented in Exhibit 12. 

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The Lohrmanns are interested in aggregating this information for ease of comparison with other funds. 

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1. Compute the fund’s holding period return for the five-year period. 

2. Compute the fund’ s arithmetic mean annual return. 

3. Compute the fund’s geometric mean annual return. How does it compare with the arithmetic mean annual return? 

4. The Lohrmanns want to earn a minimum annual return of 5 percent. The annual returns and investment amounts are presented in Exhibit 13. Is the money-weighted annual return greater than 5 percent? 

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