Reading 52 - When using HP return or annualized HP return?


I have a question regarding “Reading 52 - Portfolio Risk and Returns: Part 1”.

As you can see, for Q2, to calculate the HP over 3 years, we don’t have to annualize. While for Q6, when calculating Time-weighted rate of return over the three-year period, meaning we take the HP for each year, we annualize.

Do you know why there is a difference between the two cases?

Thank you in advance for your help