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Unformatted text preview: The simple interest approximation b. The midpoint rule (Remember that when you use the approximations like this, you are really finding the rate for the two year period. Then convert it to an annual rate.) 3. Find the time weighted rate of return over the two years . Then find the equivalent annual effective time weighted rate of return. 4. Why is the annual time weighted rate in 3 bigger than the dollar weighted rates? What does that tell us about the timing of the cashflows? 5. What would X have to be to have the annual time weighted rate of return be 20%?...
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 Fall '09
 Chisholm

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