1.) Rates of Return

The next question is based on the following: You invested a lump sum of $50,000 in a

new company ten years ago and left it there without any further investments and now, today, the

company listed on the stock exchange (an initial public offering, IPO) and your investment is

worth $575,000.

Hint: The (rate of) return from today up to a period t (also called holding period return) is defined as