A. Youpurchase a 2,000 shares of a mutual fund at a price of $42.50/share. At the end
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A.Youpurchase a 2,000 shares of a mutual fund at a price of $42.50/share. At the end of the firstyear,you receive a distribution of $2.50/share, which you reinvest in this same mutual fund at $40/share. At the end of the second year you receive a distribution of $1.50 and sell all of your position at $43.75/share. Ignoring taxes, what is your average annual return over this two-year period? What is you annualized geometric return? (20points)
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