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Basic Question 3 of 6
An analyst gathers the following information about a common stock investment:
Stock purchase (1 share), 15 January 2013, $94.00
Stock sale (2 shares @106 per share), 15 January 2014, $212.00
B. 11.60%
C. 11.90%
Stock purchase (1 share), 15 January 2012, $86.00
Stock purchase (1 share), 15 January 2013, $94.00
Stock sale (2 shares @106 per share), 15 January 2014, $212.00
The stock does not pay a dividend. The dollar-weighted rate of return on the investment is closest to ______.
A. 11.20%
B. 11.60%
C. 11.90%
User Contributed Comments 4
| User | Comment |
|---|---|
| praj24 | How do I work this out on my calculator (BAII Plus)? |
| jrojasut09 | @praj24 Use your CF functions and solve for IRR |
| msk500 | Set our a time-line from Year 0 (15/1/12), to Year 2 (15/1/2014). Record the CFs for each year and calculate the net CF for each year. These are: Year 0 = -86, Year 1 = -94, and Year 2 = +212. Key strokes: Press CF, 2ND, CE/C: CF0 = -86 Enter CF1 = -94 Enter CF2 = +212 Enter CPT IRR, CPT = 11.59538 |
| icandoit | Why i use BAII Plus could not get the answer for IRR?? We still missing NPV? |
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Learning Outcome Statements
compare the money-weighted and time-weighted rates of return and evaluate the performance of portfolios based on these measures
CFA® 2024 Level I Curriculum, Volume 1, Module 1.