Suppose You Purchase 100 Shares of GM Stock at the Beginning

question 40

Multiple Choice

Suppose you purchase 100 shares of GM stock at the beginning of year 1,and purchase another 100 shares at the end of year 1.You sell all 200 shares at the end of year 2.Assume that the price of GM stock is $50 at the beginning of year 1,$55 at the end of year 1,and $65 at the end of year 2.Assume no dividends were paid on GM stock.Your dollar-weighted return on the stock will be __________ your time-weighted return on the stock.

• A)higher than
• B)the same as
• C)less than
• D)exactly proportional to
• E)more information is necessary to answer this question

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