Your firm invested $2,504,600 in 350-day commercial paper today. At the end of the investment period (in 350 days) the firm will receive $2,592,400. a. What is the 350-day holding period rate of return on the investment

The 350-day holding period rate of return on the investment is:

= 3.5%

Explanation:

a) Data and Calculations:

Investment = $2,504,600

Total receipts from investment = $2,592,400

Investment period = 350 days

Returns (dollars) = $87,800 ($2,592,400 - $2,504,600)

Rate of return = $87,800/$2,504,600 * 100

= 3.5%

b) The rate of return is calculated as ((Current value - Original value) / Original value) x 100.  It shows, in percentage terms, the return earned by an investment over a period of time.

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