Suppose you purchase 100 shares of Air NZ stock at the beginning of year 1...
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Accounting
Suppose you purchase 100 shares of Air NZ stock at the beginning of year 1 and purchase another 100 shares at the end of year 1. You sell all 200 shares at the end of year 2. Assume that the price of GM stock is $50 at the beginning of year 1, $55 at the end of year 1, and $65 at the end of year 2. Assume no dividends were paid on GM stock.
Select one:
a. Your dollar-weighted return on the stock will be higher than your time-weighted return on the stock.
b. Your dollar-weighted return on the stock will be the same as your time-weighted return on the stock.
c. Your dollar-weighted return on the stock will be less than your time-weighted return on the stock.
d. Your dollar-weighted return on the stock will be exactly proportional to your time-weighted return on the stock.
e. none of the options are correct.
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