Monique had $13,000 in her account on October 1, 2019. On January 1, 2020 shedeposited $1000. On April 1, 2020, she withdrew $2000. On July 1, 2020 she deposited$3000. Then on October 1, 2020, her balance showed $16,500.What was her dollar-weighted annual yield rate? Compute it exactly, and compare tousing the dollar-weighted yield approximation.

Dollar weighted annual rate is that rate of return where present cash inflows are same as present…

Answered: What was her dollar-weighted annual…

What was her dollar-weighted annual yield rate? Compute it exactly, and compare to using the dollar-weighted yield approximation.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

ChapterM: Time Value Of Money Module

Section: Chapter Questions

Problem 9RE

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Concept explainers

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.

Question

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Monique had $13,000 in her account on October 1, 2019. On January 1, 2020 she
deposited $1000. On April 1, 2020, she withdrew $2000. On July 1, 2020 she deposited
$3000. Then on October 1, 2020, her balance showed $16,500.
What was her dollar-weighted annual yield rate? Compute it exactly, and compare to
using the dollar-weighted yield approximation.

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