Chapter 13 – Investment Fundamentals – Exercise
For the two questions below, respond in the text-entry box with the correct answer from the options provided (A, B, C D); and describe the approach you took
to calculate it.
1. Dollar Cost Averaging Share Price
What is the average share price for the dollar-cost averaging strategy shown below?
Regular Investment Share Price
$250 $35
$250 $31
$250 $28
$250 $37
$250 $40
A. $34.20
B. $37.14
C. $33.66
D. $36.55
2. Rate of Return on Investment
Gary purchased 250 shares of PAC stock for $37 per share and sold this same stock one year later for $44 per share. He paid commissions of $15 when he
purchased the stock and $10 when he sold the stock. Dividends of $1.50 per share were paid during the year. The total rate of return on this investment was
A. 22.98 percent.
B. 22.70 percent.
C. 18.92 percent.
D. 19.32 percent
