USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 35

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Assume you bought 100 shares of NewTech common stock on January 15, 2003 at $50.00 per share and sold it on January 15, 2004 for $40.00 per share.
-Refer to Exhibit 1.1. What was your holding period return?

• A) -10%
• B) -0.8
• C) 25%
• D) 0.8
• E) -20%

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Definitions:

Mode

The value that appears most frequently in a data set, representing the highest peak in the distribution of frequencies.

Financial Growth Factors

Components that contribute to the increase in value of financial assets or earnings.

Geometric Mean

The nth root of the product of n numbers, used to calculate the average rate of return over time or the mean of ratios.

Growth Factor

One plus the percentage increase over a period of time. A growth factor less than 1 indicates negative growth, whereas a growth factor greater than 1 indicates positive growth. The growth factor cannot be less than 0.