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Consider an investment with the returns over 4 years as shown here a. What is the compound annual growth rate (CAGR) for this investment over

Consider an investment with the returns over 4 years as shown here

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a. What is the compound annual growth rate (CAGR) for this investment over the 4 years?

The compound annual growth rate is________% (Round to two decimal places.)

b. What is the average annual return of the investment over the 4 years?

The average annual return is_________% (Round to two decimal places.)

c. Which is a better measure of the investment's past performance? If the investment's returns are independent and identically distributed, which is a better measure of the investment's expected return next year?

CAGR or Arithmatic average is a better measure of the investment's past performance while CAGR or Arithmatic average is a better measure of the investment's expected return next year.

Year Return 1 17% 2 13% 3 20% 4 17%

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