QUESTIONS 115 THROUGH 120 RELATE TO PORTFOLIO MANAGEMENT

116. An investor’s transactions in a mutual fund and the fund’s returns over a four-year period are provided in the table below: Year1 2 3 4New investment at the beginning of the year $2,500 $1,500 $1,000 $0Investment return for the year –20% 65% –25% 10%Withdrawal by investor at the end of the year $0 –$500 –$500 $0Based on these data, the money-weighted return (or internal rate of return) for the investor is closest to: A. 2.15%. B. 3.96%. C. 7.50%.