XYZ stock price and dividend history are as follows: Year Beginning-of-year Pric

Question

XYZ stock price and dividend history are as follows: Year Beginning-of-year Price Dividend paid at Year-End 2010 $100 $4 2011 $110 $4 2012 $90 $4 2013 $95 $4 1. What is the arithmetic average rate of return? Your answer should be in percentages and accurate to the hundredths. 2. Suppose that an investor buys three shares of XYZ at the beginning of 2010, buys another two shares at the beginning of 2011, sells one share at the beginning of 2012, and sells all four remaining shares at the beginning of 2013. What is the dollar-weighted rate of return (IRR)?

Explanation / Answer

s a note, I've never heard of a difference between an arithmetic and geometric average. But if someone on here has heard of that, you'll will still get better help if you show your own attempts at the problem first.)

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