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A Prospective PFP Client Comes to You with an Investment

question 6

Multiple Choice

A prospective PFP client comes to you with an investment statement.The first page of the statement,which contained the initial investment amount of a mutual fund purchased five years ago,is missing,and as a result the initial cash flow is -0-.The initial investment of the mutual fund can be determined based on the following information provided in the investment statement.The statement indicates that the five-year return for the investment was 10 percent.
Year 1: capital gain and dividend were $100
Year 2: capital gain and dividend year were $150
Year 3: no capital gain or dividend paid and the client invested $1,000
Year 4: no capital gain or dividend paid
Year 5: no capital gain or dividend paid and the client sold out of his position for $18,000

Apply knowledge of statistics to real-world problems involving finance, demographics, and academic performance.

Understand outlier identification and its impact on data analysis.

Evaluate the appropriateness of descriptive statistics in summarizing data based on its distribution.

Construct and interpret dotplots for data visualization.

Definitions:

Public Park

An area of natural, semi-natural, or planted space set aside for human enjoyment and recreation or for the protection of wildlife or natural habitats.

Nonexcludable

Referring to a good, describes the case in which the supplier cannot prevent those who do not pay from consuming the good.

Nonrival

A characteristic of a good or service that allows its consumption by one person without reducing its availability to others.

Common Resources

Natural or man-made resources that are not owned by anyone, tend to be overused or depleted, and are difficult to exclude people from using.