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Category > Business & Finance Posted 15 May 2017 My Price 6.00

Discuss the ethics of the 21% return claim made by the Damon Investment Company.

Ethics Case 6–1

Rate of return

The Damon Investment Company manages a mutual fund composed mostly of speculative stocks. You recently saw an ad claiming that investments in the funds have been earning a rate of return of 21%. This rate seemed quite high so you called a friend who works for one of Damon’s competitors. The friend told you that the 21% return figure was determined by dividing the two-year appreciation on investments in the fund by the average investment. In other words, $100 invested in the fund two years ago would have grown to $121 ($21  ÷  $100  =  21%)

Required:

Discuss the ethics of the 21% return claim made by the Damon Investment Company.

 

Answers

Alpha Geek
(8)
Status NEW Posted 15 May 2017 10:05 AM My Price 6.00

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file 1494844108-Answer.docx preview (134 words )
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