One dollar invested in a portfolio of U.S. common stocks in 1900 would have grown in nominal value by the end of year 2017 to
A)$47,661.
B)$245.
C)$74.
D)$6.

Question

Quizplus · Accepted Answer

This question is testing knowledge of long-term stock market performance. According to historical data, including dividends reinvested, the average annual return of the US stock market has been about 9-10% per year over the very long-term (100+ years). Using this average annual return, a $1 investment in 1900 would be worth approximately $47,661 in nominal value by the end of 2017. Therefore, choice A is the correct answer. The other answer choices are significantly lower and do not reflect the long-term growth potential of the stock market.

One Dollar Invested in a Portfolio of U