Suppose You Purchase One Share of the Stock of VM

Multiple Choice

Suppose you purchase one share of the stock of VM Corporation at the beginning of year 1 for $36. At the end of year 1, you receive a $2 dividend and buy one more share for $30. At the end of year 2, you receive total dividends of $4 (i.e., $2 for each share) and sell the shares for $36.45 each. The time-weighted return on your investment is

A) −1.75%.
B) 4.08%.
C) 6.74%.
D) 11.46%.
E) 12.35%.