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XYZ stock price and dividend history are as follows:

Customer Question

XYZ stock price and dividend history are as follows:
Year Begining year Prices for the Year 05-08 are:
2005 $100
2006 $110
2007 $90
2008 $95

Dividend paid at year-End for all the above years are $4 from 2005-2008.
An investor buys three shares of XYZ at the beginning of 2005, buys another two shares at the beginning of 2006, and one share at the beginning of 2007, and sells all four remainging shares at the beginning of 2008.

Requrement1:
What are the Arithmetic and geometric average time-weighted rates of return for the investor?
Arithmeitc mean _________%
Geometric mean __________%

Requirement 2:
What is the dollar-weighted return?
Rate of return ___________%

Prepare a chart of cash flows for the four dates corresponding to the turns fo the year for January 1, 2005, to January 1, 2008.

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