Suppose You Purchase One Share of the Stock of Cereal

question 27

Multiple Choice

Suppose you purchase one share of the stock of Cereal Correlation Company at the beginning of year 1 for $50. At the end of year 1, you receive a $1 dividend and buy one more share for $72. At the end of year 2, you receive total dividends of $2 (i.e., $1 for each share) and sell the shares for $67.20 each. The time-weighted return on your investment is

• A) 10.0%.
• B) 8.7%.
• C) 19.7%.
• D) 17.6%.

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Definitions:

Trust And Wisdom

Essential qualities in both personal and professional relationships, involving confidence in someone's reliability and soundness in judgment or knowledge.

Business Friendship

A professional relationship that involves mutual interests and cooperation between individuals who may also share a personal rapport beyond formal business interactions.

Personal Friendship

A close and intimate relationship formed between individuals through mutual affection and personal bond.

Relationship Selling

A sales approach focused on building long-term customer relationships rather than just making immediate sales, emphasizing trust and consultation.