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Suppose You Purchase 100 Shares of Coca Cola Stock at the Beginning

Question 3

Multiple Choice

Suppose you purchase 100 shares of Coca Cola stock at the beginning of year 1 and purchase another 100 shares at the end of year 1. You sell all 200 shares at the end of year 2. Assume that the price of Coca Cola stock is $50 at the beginning of year 1, $55 at the end of year 1, and $65 at the end of year 2. Assume no dividends were paid on Coca Cola stock. Your dollar-weighted return on the stock will be __________ your time-weighted return on the stock.


A) higher than
B) the same as
C) less than
D) exactly proportional to
E) More information is necessary to answer this question.

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