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Jason deposits $100 in an investment at the beginning of the year. After 4 months, the investment has grown to $110, and Jason withdraws $15. The value of the investment at the end of the year is X, where X > 0. Let i denote the dollar-weighted rate of return of the investment over the year. If the time-weighted rate of return is also i, find the value of i. О а. 35% O b. 42.5% С. 40% d. 37.5% e. 32.5%

Jason deposits $100 in an investment at the beginning of the year. After 4 months, the investment has grown to $110, and Jason withdraws $15. The value of the investment at the end of the year is X, where X > 0. Let i denote the dollar-weighted rate of return of the investment over the year. If the time-weighted rate of return is also i, find the value of i. О а. 35% O b. 42.5% С. 40% d. 37.5% e. 32.5%

Essentials Of Investments
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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Jason deposits $100 in an investment at the beginning of the year. After 4 months, the investment has grown to $110, and Jason withdraws $15. The value of the investment at the end of the year is X, where X > 0. Let i denote the dollar-weighted rate of return of the investment over the year. If the time-weighted rate of return is also i, find the value of i. а. 35% b. 42.5% С. 40% d. 37.5% е. 32.5%
Transcribed Image Text:Jason deposits $100 in an investment at the beginning of the year. After 4 months, the investment has grown to $110, and Jason withdraws $15. The value of the investment at the end of the year is X, where X > 0. Let i denote the dollar-weighted rate of return of the investment over the year. If the time-weighted rate of return is also i, find the value of i. а. 35% b. 42.5% С. 40% d. 37.5% е. 32.5%
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