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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)	Cash Flow
0	Buy one share @ $50
1	Buy another share @ $53 Stock pays $2 dividend per share
2	Stock pays $2 dividend per share Sell all shares @ $54

1) Dollar Weighted Approach

2) Time Weighted Approach

Which one is minimizing the influence of the actions of investments (flows)?

Which one is a more appropriate measure of wealth change from the investor's perspective?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92605894

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