John Began His Investing Program with a $5,500 Initial Investment

question 92

Multiple Choice

John began his investing program with a $5,500 initial investment. The table below recaps his returns each year as well as the amounts he added to his investment account. What is his dollar-weighted average return?
$\begin{array}{ccr}\text { Time } & \text { Investment } & \text { Return } \\0 & \$ 5,500 & 8.5\% \\1 & \$ 2,000 & -5.0\% \\2 & \$ 2,600 & 4.5\% \\3 & \$ 3,000 & 9.0\% \\4 & \$ 900 & -2.5\%\end{array}$

• A)1.5%
• B)1.8%
• C)2.0%
• D)2.2%
• E)2.6%

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Definitions:

Assets

Economic resources owned or controlled by an individual, company, or entity, expected to provide future benefits.

Liabilities

Financial obligations or debts owed by a business to external parties or creditors.

Owner's Capital

The amount of money and other assets invested into a business by its owner or owners.

Owner's Drawings

Money removed by a sole proprietorship or partnership owner from the company for their private use.