Question

Find an approximate annual dollar-weighted yield received by Abiyote for the three-year period from January 1, 1994 until January 1, 1997 using

Answer 1

The information about Abiyote's investment is missing, so I looked for similar questions:

Abiyote's time weighted rate of return = [(1 + HP₁ ) x (1 + HP₂) x (1 + HP₃)]¹/³ - 1

HP₁ = ($28,212 - $24,500) / $24,500 = 0.1515

HP₂ = ($15,892 - $18,212) / $18,212 = -0.1274

HP₃ = ($30,309 - $23,892) / $23,892 = 0.2686

TWRR = [(1.1515 x 0.8726 x 1.2686)¹/³ - 1 = 0.08426 = 8.43%

You calculate TWRR in the same way as you calculate geometric mean.