Show explanation for each question.

1. The geometric average of -12%, 20%, and 25% is a.) 8.42% b.) 11% c.) 9.7% d.) 18.88% 2. The dollar-weighted return is the a.) difference between cash inows and cash outows b.) arithmetic average return c.) geometric average return (1.) internal rate of return 3.An investment earns 10% the rst year, earns 15% the second year, and loses 12% the third year. The total compound return over the 3 years was a.) 41.68% b.) 11.32% c.) 3.64% d.) 13% 4. Annual percentage rates can be converted to effective annual rates by means of the following formula: a.) [1 + (APR)]"n - 1 11) (APRXH) c.) (APR) d.) (periodic rate)(n) 5. Suppose you pay $9,700 for a $10,000 par Treasury bill maturing in 3 months. What is the holding-period return for this investment? a.) 3.01% b.) 3.09% c.) 12.42% d.) 16.71% 6. Suppose you pay $9,400 for a $10,000 par Treasury bill maturing in 6 months. What is the effective annual rate of return for this investment? at.) 6.38% b.) 12.77% c.) 13.17% d.) 14.25%