9) Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 1995, Christie's auctioned the William de Kooning painting Untitled. The highest bid of $2.2 million was rejected by the owner, who had purchased the painting at the height of the art market in 1989 for $3.52 million. Had the seller accepted the bid, what would his annual rate of return have been

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Business

Anastasia Conley

4 March, 14:46

9) Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 1995, Christie's auctioned the William de Kooning painting Untitled. The highest bid of $2.2 million was rejected by the owner, who had purchased the painting at the height of the art market in 1989 for $3.52 million. Had the seller accepted the bid, what would his annual rate of return have been

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Micaela Martin · Answer 1

-7.05% per annum

Explanation

Years of investment in painting 1989 to 1995 = 6yrs

Expected loss in investment 3.2m - 2.2 m = 1.32

Net loss per annum 1.32/6 = 0.22

Annual net loss return=0.22/3.12*100

=7.05%