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The Damon Investment Company manages a Mutual fund composed mostly of speculative stocks. You recently saw...

The Damon Investment Company manages a Mutual fund composed mostly of speculative stocks. You recently saw an ad claiming that investments in the funds have been earning a rate of return of 21%. This rate seemed quite high, so you called a friend who works for one of Damon’s competitors. The friend told you that the 21% return figure was determined by dividing the 2-year appreciation on investments in the fund by the average investment. In other works, $100 invested in the fund 2 years ago would have grown to $121 ($21 / $100 = 21%). Discuss the ethics of the 21% claim.

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ekkarill92 answered 2 years ago
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