Tom Decides to Begin Investing Some Portion of His Annual

question 68

Multiple Choice

Tom decides to begin investing some portion of his annual bonus, beginning this year with $5,000. In the first year he earns a 10% return and adds $3,500 to his investment. In the second his portfolio loses 5% but, sticking to his plan, he adds $500 to his portfolio. In this year his portfolio returns 2%. What is Tom's dollar-weighted average return on his investments?

• A) 0.34 percent
• B) 1.02 percent
• C) 1.54 percent
• D) 2.23 percent
• E) 2.58 percent

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Definitions:

Tropical Dry Forests

Ecosystems found in tropical regions characterized by a distinct dry season, supporting diverse plant and animal life adapted to arid conditions.

Marsupials

Marsupials are a group of mammals that typically carry and nurse their young in a pouch, such as kangaroos and koalas.

Australian Realm

A biogeographic zone that includes Australia and adjacent islands, characterized by unique flora and fauna adapted to its environments.

Palearctic Realm

A biogeographic realm covering parts of Northern Africa, all of Europe and Asia north of the Himalayas, and the northern and central parts of the Arabian Peninsula.