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A Prospective PFP Client Comes to You with an Investment

Question 2

Multiple Choice

A prospective PFP client comes to you with an investment statement.The first page of the statement,which contained the initial investment amount of a mutual fund purchased five years ago,is missing,and as a result the initial cash flow is -0-.The initial investment of the mutual fund can be determined based on the following information provided in the investment statement.The statement indicates that the five-year return for the investment was 10 percent.
Year 1: capital gain and dividend were $100
Year 2: capital gain and dividend year were $150
Year 3: no capital gain or dividend paid and the client invested $1,000
Year 4: no capital gain or dividend paid
Year 5: no capital gain or dividend paid and the client sold out of his position for $18,000


A) 8,484.2598.
B) 10,640.1450.
C) 11,574.3498.
D) 11,487.3091.

Correct Answer:

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