CFAI Mock Exam (PM) : Question 118

CFA Level I
#1

Is there an easier way to solve for this or is the explanation/answer given the only way to solve for it. Seems to take a long time to solve the problem. Please help if you know of a quicker way. The question is below for a reference but I was unable to copy and paste the entire thing.

  1. An investor’s transactions in a mutual fund and the fund’s returns over a four-year period are provided in the following table:

Based on this data, the money-weighted return (or internal rate of return) for the investor is closest to:

A. 7.50%. B. 2.15%. C. 3.96%.

#2

There is an easier way to do this problem however, you shouldn’t always rely on it. One of the answers is arthmetic mean of the returns ( i guess it is 7.50). The other one (I guess 2.15) is the Geometric mean of HPR (i.e Time weighted return). So, the remaining one must be the answer.