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Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby’s sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $10,311,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,377,500. What was his annual rate of return on this sculpture?

Respuesta :

Answer:-4.46%

Explanation:

Annual rate of  return=[tex]\sqrt[Number of years]{Future value/ present value}[/tex] - 1

=[tex]\sqrt[4]{10,311,500/12,377,500}[/tex] -1

=[tex]\sqrt[4]{0.833084225409008}[/tex] -1

=0.955371381687618-1

=-0.04462

Which can be mentioned in % as -4.46%

ARR of return on this sculpture is -4.46%

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