As a rule of thumb, 8% annualized net returnover a minimum holding period of five years is arealistic figure. Pablo Picasso’s 1905 portrait Boywith a Pipe sold for $104.2 million in an auction atSotheby’s Holdings, Inc., on June 24, 2004, shattering the existing record for art and ushering in anew era in pricing for 20th-century paintings. ThePicasso, sold by the philanthropic Greentree Foundation, cost Mr. Whitney about $30,000 in 1950. Determine the annual rate of appreciation of the artworkover 54 years. Is this a good investment?
As a rule of thumb, 8% annualized net returnover a minimum holding period of five years is arealistic figure. Pablo Picasso’s 1905 portrait Boywith a Pipe sold for $104.2 million in an auction atSotheby’s Holdings, Inc., on June 24, 2004, shattering the existing record for art and ushering in anew era in pricing for 20th-century paintings. ThePicasso, sold by the philanthropic Greentree Foundation, cost Mr. Whitney about $30,000 in 1950. Determine the annual rate of appreciation of the artworkover 54 years. Is this a good investment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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As a rule of thumb, 8% annualized net return
over a minimum holding period of five years is a
realistic figure. Pablo Picasso’s 1905 portrait Boy
with a Pipe sold for $104.2 million in an auction at
Sotheby’s Holdings, Inc., on June 24, 2004, shattering the existing record for art and ushering in a
new era in pricing for 20th-century paintings. The
Picasso, sold by the philanthropic Greentree Foundation, cost Mr. Whitney about $30,000 in 1950. Determine the annual rate of appreciation of the artwork
over 54 years. Is this a good investment?
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