You invested a lump sum of $50,000 in a new company ten years ago and left it
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Question:
Hint: The (rate of) return from today up to a period t (also called holding period return) is defined as
Returnt = ((Value at t (Vt)) / (Value today (V0))) - 1
a) Given the above, what total return (i.e., cumulative, not annualized) did you earn on your investment across the ten years (i.e., over t=10 years)?
b) Given the above, what was the effective annual return on your investment?
c) Given the above, what was the effective monthly return on your investment?
d) For this question, assume the Banker's rule, which is to assume every month has 30 days, and there are 360 days in the year. Based on the above, what was the effective daily return on your investment?
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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