Your task is to compute the investment performance of the Walbright Fund during 2014. The facts are as follows: On 1 January 2014, the Walbright Fund had a market value of $100 million. During the period 1 January 2014 to 30 April 2014, the stocks in the fund showed a capital gain of $10 million. On 1 May 2014, the stocks in the fund paid a total dividend of $2 million. All dividends were reinvested in additional shares. Because the fundâ€™s performance had been exceptional, institutions invested an additional $20 million in Walbright on 1 May 2014, raising assets under management to $132 million ($100 + $10 + $2 + $20). On 31 December 2014, Walbright received total dividends of $2.64 million. The fundâ€™s market value on 31 December 2014, not including the $2.64 million in dividends, was $140 million. The fund made no other interim cash payments during 2014. Based on the information given, address the following.
i. Compute the Walbright Fundâ€™s time-weighted rate of return.
ii. Compute the Walbright Fundâ€™s money-weighted rate of return.
iii. Interpret the differences between the time-weighted and money-weighted rates of return.