A Portfolio Manager Has the Following Sequence of Cash Flows

question 15

Multiple Choice

A portfolio manager has the following sequence of cash flows over a two year period. $\begin{array}{|c|c|c|c|}\hline \text { Time } & \begin{array}{c}\text { Market Value before } \\\text { cash flow }\end{array} & \text { Cash In } & \begin{array}{c}\text { Market Value after } \\\text { cash flow }\end{array} \\\hline 0 & \$ 0 & \$ 3,000 & \$ 3,000 \\\hline 1 & \$ 3,200 & \$ 1,950 & \$ 5,150 \\\hline 2 & \$ 6,000 & -\$ 90 & \$ 5,910 \\\hline\end{array}$ Calculate the portfolio manager's time weighted return.

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

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Definitions:

Government Prescribes

Refers to regulations or directives made by a government to influence or control certain activities.

Private Property

Land or belongings owned by individuals or corporations, distinct from property owned by the government or community.

Market System

This economic structure allows for the determination of investment, production, and distribution through the interplay of supply and demand, ensuring that the pricing of goods and services occurs in an open price system.