Jim Began His Investing Program with a $4000 Initial Investment

question 11

Multiple Choice

Jim began his investing program with a $4000 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?

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

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Definitions:

Market Yield

The current annual income returned on an investment, measured as a percentage of the investment's market price.

Zero-Coupon

A type of bond that does not pay periodic interest payments and is instead sold at a discount to its face value, with the full face value received by the holder at maturity.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, taking into account its current market price, face value, interest payments, and time to maturity.