When comparing the returns of various-sized investments

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Reference no: EM131822392

(a) You purchased a stock last year for $25. Over the course of the year, the stock paid a $5/share dividend. Your HPR over the course of the year is -4%. Find the price you sold the stock for. Round intermediate steps to four decimals and your final answer to two decimals

(b) You're in the market for a new car. After negotiating with the salesperson and the manager, you are given a choice between two offers. The first is a $3,000 discount on the price of the car. The second is a 0% loan offer for four years. You should always take the cash back because money received today is worth more than money received in the future.

TRUE

FALSE

(c) When comparing the returns of various-sized investments, percentage returns are typically more useful than dollar returns.

TRUE

FALSE

(d) Returns on an investment can be calculated only if the investment is sold and the capital gain is realized.

TRUE

FALSE

(e) Suppose you find that the present value of the cash inflows that an asset provides equals the present value of the cash outflows associated with investing in it. If you choose to invest in the asset, your rate of return must equal zero.

TRUE

FALSE

Reference no: EM131822392

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