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Hey I am confused on how to solve the square root equation with the 4 in front on my calculator and am confused if the
Hey I am confused on how to solve the square root equation with the 4 in front on my calculator
and am confused if the geometric return is 9.58% or 1.4421
if you can explain these 2 things to me it would mean a lot thanks.
Geometric Return: Example (1 of 2) - Recall our earlier example: \begin{tabular}{ccll} Year & Return & & Geometric average return = \\ \hline 1 & 10% & (1+rg)4 \\ 2 & 5% & =(1+r1)(1+r2)(1+r3)(1+r4) \\ 3 & 20% & rg \\ 4 & 15% & =4(1.10)(.95)(1.20)(1.15)1 \\ & & =0.095844 or 9.58% \end{tabular} - So, our investor made an average of 9.58% per year, compounded annually, realizing a holding period return of 44.21%. 1.4421=(1.095844)4Step by Step Solution
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