Answer:
Arithmetic Average time-weighted Return 1.56%
Geometric Average time-weighted Return 0.918%
Explanation:
Computation for the arithmetic and geometric average time-weighted rates of return for the investor for XYZ
Time-weighted average returns are tend to be based on year by year or Holding period rates of return.
Therefore the first step is to calculate for the holding period return for each year.
Using this formula
Holding Period Return = (End Value – Beginning Value + Cash Flow)/ Beginning Value
Let plug in the formula to calculate for each return
2015 = (147-132+4)/132
2015=19/132
2015=14.39%
2016 = (120 -147+4)/147
2016=23/147
2016=-15.65%
2017 = (125 -120+4)/120
2016=9/120
2016=7.5%
Calculation for Arithmetic Average time-weighted Return = (14.39% - 15.65% + 7.5%)/4
=6.24%/4
= 1.56%
Calculation for the Geometric Average time-weighted Return
= [(1+0.1439) x (1-0.1565) x (1+0.075)]^1/4 - 1
= 0.918%
Therefore the Arithmetic Average time-weighted Return will be 1.56% While Geometric Average time-weighted Return will be 0.918%
Answer:
Explanation:
According to Salman Khan of Khan Academy, he states that simplifying assumptions in economic reasoning can cause various effects. Such as it helps you clarify your thinking, as well as being dangerous due to the fact that they may be wrong or completely irrelevant. These assumptions may also allow you to prove things based solely on the assumptions.
If both consumers and producers are experiencing a surplus the market is efficient
Having a good attitude towards work.
Never look at what you can not do, try to see what your good at.
Having good communication with the people you work with.