A Portfolio Manager Has the Following Sequence of Cash Flows

question 65

Multiple Choice

A portfolio manager has the following sequence of cash flows over a two year period. $$\begin{array} { | l | c | c | c | } \hline \text { Time } & 0 & 1 & 2 \\\hline \text { autflows } & - \$ 2,000 & - \$ 500 & \\\hline \text { inflows } & & \$ 50 & \$ 3,090 \\\hline\end{array}$$ Calculate the portfolio manager's dollar weighted return.

• A) 13.56%
• B) 11.48%
• C) 15.50%
• D) 8.75%
• E) 10.67%

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Definitions:

Latané

Refers to Bibb Latané, a social psychologist known for his work on social impact theory and the bystander effect.

Consolidation

The process of combining assets, liabilities, and other financial items of two or more entities into one.

Clustering

The process of grouping a set of objects in such a way that objects in the same group are more similar to each other than to those in other groups.

Cultural Factors

Elements influenced by culture that affect individual behavior, beliefs, and social interactions within a society.