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    Analysis of Investment Performances

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    ** Please see the attached file for the complete problem description **

    As a private investor, you have collected the following data over the past five years for your analysis of investment performance.

    (Please see the attached file for the data)

    a) Calculate the arithmetic mean and geometric mean for Fund (UK Active) for the past five years; 2006 to 2010.

    b) Compare and contrast, with numerical examples, the use of time-weighted return and money-weighted return.

    c) Determine the IQR of Fund (UK Active)'s returns over the period

    ...(please see the attached file).

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    Solution Preview

    ** Please see the attached file for the complete solution response **

    b) Time weighted return:
    The time weighted return (TWR) is a compound growth rate. TWR of an asset requires the asset to be revalued at the point of each cash flow. These return are then compounded together to find out the TWR for the whole investment period. Based on this a weighted ...

    Solution Summary

    This solution provides a tutorial explaining a series of capital budgeting problems.