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Question: Return with Changing Investments

What is the average monthly return of the following investment?

Month

Action (assuming occur at the end of the period)

Fund return

0

Invest $100 to an equity index fund

N/A

1

Invest $30 to an equity index fund

   2%

2

Withdraw $40 from the fund

   3%

3

Receive $5 from the fund as dividend

   -1%

4

Withdraw all investments from the fund

    2%

1) Dollar Weighted Approach

2) Time Weighted Approach

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M92604265

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