## [answered] A manager buys three shares of stock today, and then sells

 A manager buys three shares of stock today, and then sells one of those shares each year for the next 3 years. His actions and the price history of the stock are summarized below. The stock pays no dividends.

 Time Price ? Action 0 \$ ?110 ? ? ??Buy 3 shares 1 ? 120 ? ? Sell 1 share 2 ? 120 ? ? Sell 1 share 3 ? 120 ? ? Sell 1 share

 a. Calculate the time-weighted geometric average return on this ?portfolio.??(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

 ??Geometric average return ?% ?

 b. Calculate the time-weighted arithmetic average return on this portfolio.?(Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.)

 ??Arithmetic average return ?% ?

 ??Dollar-weighted average return ?% ?

Step-by-step solution

1. Step 1 of 4

The given information is summarized as:

The manager buys three shares and sells one share each year for the next three

years.

No Dividends are paid by the...

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This question was answered on: Sep 18, 2020

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