1. You are evaluating the performance of two investment managers in your team:

Soomro: In the last 200 days, he has earned a holding period return of 9.2 percent.
Seemi: Over the past 5 months, her holding period return is 6.0%. Which manager performed better?

A. Soomro
B. Seemi
C. Both did equally well.

 

2. Saman purchases two shares of Sun Co, one for $32 at time t = 0 and the other for $45 at t = 1. At t = 2, he sells them both for $53 each. The stock paid a dividend of $0.75 per share at t = 1 and at t = 2. The periodic money weighted rate of return on the investment is closest to:

A. 23.82%.
B. 25.76%.
C. 26.75%.

 

3. Fred David invested in the stock of a hypothetical company called Stars Ltd. He purchased three shares worth $100 each at the beginning of the first year. He invested in another share worth $115 before the beginning of the second year. He sold the four shares at the end of the second year for a price of $120 per share. At the end of each period, the stock paid a dividend of $2 per share. Which of the following is most likely to be the money-weighted rate of return?

A. 8.76%.
B. 9.62%.
C. 10.66%.

 

Answers: SelectShow

 

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