Two mutual fund managers, Martha and David, have been discussing whose fund is the top performer. Martha states that investors bought shares in her mutual fund 11 years ago for $23.00, and those shares are now worth $53.00. David states that investors bought shares in his mutual fund 7 years ago for only $3.60, and they are now worth $8.20. Which mutual fund manager had the higher growth rate for the management period? Should this comparison be made over different management periods? Why or why not? Which mutual fund manager has had the highest growth rate for the management period? (Select the best response.) A. David has had the highest growth rate of 12.48% for the management period. B. David has had the highest growth rate of 7.88% for the management period. C. Martha has had the highest growth rate of 7.88% for the management period. D. Martha has had the highest growth rate of 12.48% for the management period. Which of the following statement is true? (Select the best response.) A. A valid comparison can only be made over different management period due to tax considerations. B. A valid comparison can only be made over the same management period due to tax considerations. C. A valid comparison can only be made over different management period due to changing market conditions. D. A valid comparison can only be made over the same management period due to changing market conditions.
Two mutual fund managers, Martha and David, have been discussing whose fund is the top performer. Martha states that investors bought shares in her mutual fund 11 years ago for $23.00, and those shares are now worth $53.00. David states that investors bought shares in his mutual fund 7 years ago for only $3.60, and they are now worth $8.20. Which mutual fund manager had the higher growth rate for the management period? Should this comparison be made over different management periods? Why or why not? Which mutual fund manager has had the highest growth rate for the management period? (Select the best response.) A. David has had the highest growth rate of 12.48% for the management period. B. David has had the highest growth rate of 7.88% for the management period. C. Martha has had the highest growth rate of 7.88% for the management period. D. Martha has had the highest growth rate of 12.48% for the management period. Which of the following statement is true? (Select the best response.) A. A valid comparison can only be made over different management period due to tax considerations. B. A valid comparison can only be made over the same management period due to tax considerations. C. A valid comparison can only be made over different management period due to changing market conditions. D. A valid comparison can only be made over the same management period due to changing market conditions.
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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Interest rate. Two mutual fund managers, Martha and David, have been discussing whose fund is the top performer. Martha states that investors bought shares in her mutual fund
11
years ago for
$23.00,
and those shares are now worth
$53.00.
David states that investors bought shares in his mutual fund
7
years ago for only
$3.60,
and they are now worth
$8.20.
Which mutual fund manager had the higher growth rate for the management period? Should this comparison be made over different management periods? Why or why not?Which mutual fund manager has had the highest growth rate for the management period? (Select the best response.)
David
has had the highest growth rate of
12.48%
for the management period.David
has had the highest growth rate of
7.88%
for the management period.Martha
has had the highest growth rate of
7.88%
for the management period.Martha
has had the highest growth rate of
12.48%
for the management period.Which of the following statement is true? (Select the best response.)
A valid comparison can only be made over different management period due to tax considerations.
A valid comparison can only be made over the same management period due to tax considerations.
A valid comparison can only be made over different management period due to changing market conditions.
A valid comparison can only be made over the same management period due to changing market conditions.
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