A Pension Fund That Begins with $500,000 Earns 15% the First

question 72

Multiple Choice

A pension fund that begins with $500,000 earns 15% the first year and 10% the second year. At the beginning of the second year, the sponsor contributes another $300,000. The dollar-weighted and time-weighted rates of return, respectively, were

• A) 11.7% and 12.5%.
• B) 12.1% and 12.5%.
• C) 12.5% and 11.7%.
• D) 12.5% and 12.1%.

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