Chapter 5, #9 Although appealing to more refined tastes, art as a collectible ha

Question

Chapter 5, #9

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction house sold a sculpture at auction for a price of $10,321,500. Unfortunately for the previous owner, he had purchased it in 1998 at a price of $12,397,500.

What was his annual rate of return on this sculpture? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

What was his annual rate of return on this sculpture? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Explanation / Answer

selling price 10321500 purchase price 12397500 difference in price -2076000 rate of return -16.7453116 holding period 5 Year annual rate of return -3.34906231 percent

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