You purchase 100 shares of IBM at $100. The stock pays an annual dividend of $4.00. In three years, the stock is trading at $140.00. (this is not a margin problem) a) What is your annualized time weighted rate of return? b) How does your dollar weighted rate of return compare to what you calculated in part a) if after year 1 you sold 50 shares at $90? You do not need to calculate your dollar return but need to comment why it is the same, less than or greater than. For extra credit you can try and calculate the dollar weighted return. 

Answer rating: 100% (QA)

To calculate the annualized timeweighted rate of return for the scenario described we can follow the... View the full answer