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Suppose that an investor opens an account by depositing $1,000 today (end of year 0). During year 1, his account returns 3%. At the end
Suppose that an investor opens an account by depositing $1,000 today (end of year 0). During year 1, his account returns 3%. At the end of year 1, he deposits an additional $2,500 into the account. During year 2, his account returns -12%. At the end of year 2, he deposits an additional $500 into the account. During year 3, his account earns a 10% return and he liquidates the account at the end of year 3. Calculate the investors arithmetic and geometric average return.
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