Jim Began His Investing Program with a $4,000 Initial Investment

question 65

Multiple Choice

Jim began his investing program with a $4,000 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?
$$\begin{array} { c l c } \text { Time } & \text { Investment } & \text { Return } \\0 & \$ 4,000 & 10\%\\1 & \$ 2,800 & -5\% \\2 & \$900 &2\% \\3 & \$ 1,600&8\% \\4 & \$ 2,100 &-3\% \\5 & \$ 2,400 &6\%\end{array}$$

• A)1.6%
• B)2.2%
• C)2.6%
• D)3.2%
• E)3.6%

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Definitions:

Identity Diffusion

A stage in identity development where an individual lacks a clear sense of personal identity and direction.

Commitment

A state or quality of being dedicated to a cause, activity, or relationship, often implying a strong sense of loyalty and responsibility.

Moratorium

A suspension of activity or a period of deliberation and experimentation without immediate commitment, often related to identity exploration during adolescence.

White Privilege

Social and economic benefits that are automatically granted to individuals simply because they are members of the White majority.