Suppose You Purchase One Share of the Stock of Volatile

question 35

Multiple Choice

Suppose you purchase one share of the stock of Volatile Engineering Corporation at the beginning of year 1 for $36. At the end of year 1, you receive a $2 dividend and buy one more share for $30. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share) and sell the shares for $36.45 each. The time-weighted return on your investment is

• A) -1.75%.
• B) 4.08%.
• C) 6.74%.
• D) 11.46%.
• E) 12.35%.