In July of 2012, Taylor purchased 1,700 shares of XYZ common stock for $75,000. He then sold 1,000 shares of XYZ in July of 2013 for $37 per share. The remaining 700 shares were finally sold for $75.71 per share in July 2014.
a. What was Taylor's internal rate of return on this investment?
b. What was the ERR on this investment if the external reinvestment rate is 9% per year?