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:

Rugae

Folds, such as those in the lining of the stomach.

Gastric Juices

are a mixture of mucus, hydrochloric acid, and digestive enzymes produced by the stomach lining to digest food.

Stomach

Muscular region of the vertebrate digestive tract, extending from the esophagus to the small intestine.

Suspension Feeders

Organisms that feed by filtering suspended matter and food particles from water, often found in aquatic environments.