Suppose You Purchase One Share of the Stock of Cereal

question 67

Multiple Choice

Suppose you purchase one share of the stock of Cereal Correlation Company at the beginning of year 1 for $50.At the end of year 1,you receive a $1 dividend,and buy one more share for $72.At the end of year 2,you receive total dividends of $2 (i.e. ,$1 for each share) ,and sell the shares for $67.20 each.The time-weighted return on your investment is _________.

• A) 10.00%
• B) 8.78%
• C) 19.71%
• D) 20.36%
• E) none of these

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Definitions:

Outsourcing

Is a decision to allow one or more of a company’s value chain activities to be performed by onshore independent specialist companies that focus all their skills and knowledge on just one kind of activity.

Bona Fide

Genuine; real; without intention to deceive or any fraud involved.

Non-Discrimination Quotas

Policies or measures implemented to ensure equal opportunities by requiring a certain percentage of minorities or women in hiring or admissions.