Arthur buys $4, 000 worth of stock. Five month later, the value of stock has fallen...

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Arthur buys $4, 000 worth of stock. Five month later, the value of stock has fallen to $3,200 and Arthur buys another $500 worth of stock. After another ten month, Arthur's holdings are worth $3,500 and he sells off $900 of them. Nine months later, Arthur finds that his stock has a value of $2,900. (a) Compute the annual time-weighted yield rate of the stock over the two-year period. (b) Compute the annual dollar-weighted yield Arthur over the two-year period. Arthur buys $4, 000 worth of stock. Five month later, the value of stock has fallen to $3,200 and Arthur buys another $500 worth of stock. After another ten month, Arthur's holdings are worth $3,500 and he sells off $900 of them. Nine months later, Arthur finds that his stock has a value of $2,900. (a) Compute the annual time-weighted yield rate of the stock over the two-year period. (b) Compute the annual dollar-weighted yield Arthur over the two-year period.

Answer rating: 100% (QA)

To calculate the annual timeweighted yield rate and the annual dollarweighted yield well follow these steps a Annual TimeWeighted Yield Rate Calculate ... View the full answer