What Is the Internal Rate of Return (IRR) of an Investment

question 63

Multiple Choice

What is the internal rate of return (IRR) of an investment that requires an initial investment of $11,000 today and pays $15,400 in one year's time?

• A) 37%
• B) 44%
• C) 43%
• D) 40%

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Definitions:

Sample Mean

The average value of a sample, calculated by summing all observations and dividing by the number of observations.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, underlying the principle of estimation in inferential statistics.

Mean

The arithmetic average of a set of numeric values, calculated by adding all the values together and dividing by the number of values.

Infinite Population

A theoretical or practical concept where the population size approaches infinity, making it impractical or impossible to study every individual in the population.