Tom Decides to Begin Investing Some Portion of His Annual

Multiple Choice

Tom decides to begin investing some portion of his annual bonus, beginning this year with $6,000. In the first year he earns an 8 percent return and adds $3,000 to his investment. In the second his portfolio loses 4 percent but, sticking to his plan, he adds $1,000 to his portfolio. In this year his portfolio returns 2 percent. What is Tom's dollar-weighted average return on his investments?

A) .34%
B) 1.20%
C) 1.54%
D) 2.23%
E) 2.58%