Question

The rate of return of an investor's stock portfolio is - $4,582.71. If the rate of return of the investor's portfolio increases by $210.85 per day for 30 days, what is the new rate of return of the portfolio? a) $6,170.71 b) $6,800.71 c) $4,272.71 d) $6,352.71

Answer 1

To calculate the new rate of return, we add the total increase after 30 days to the initial rate of return, resulting in a new rate of return of $1,742.79, which does not match any of the provided options.

Step-by-step explanation:

The initial rate of return is -$4,582.71. The daily increase in the rate of return is $210.85. Over 30 days, the total increase is 30 days × $210.85/day = $6,325.50. To find the new rate of return, we add this total increase to the initial rate of return.

New rate of return = Initial rate of return + Total increase

New rate of return = (- $4,582.71) + $6,325.50

New rate of return = $1,742.79

The initial rate of return of -$4,582.71, when increased by the accumulated amount over 30 days, results in a positive rate of return of $1,742.79. Therefore, none of the options (a) $6,170.71, (b) $6,800.71, (c) $4,272.71, or (d) $6,352.71 match the calculated result.