Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ten annual returns are listed in the following table: (Click on the following icon in order to copy its contents into a spreadsheet.) - 19.9%

image text in transcribed

Ten annual returns are listed in the following table: (Click on the following icon in order to copy its contents into a spreadsheet.) - 19.9% 16.6% 18.0% - 50.0% 43.3% 1.2% 16.5% 45.6% 45.2% 3.0% a. What is the arithmetic average return over the 10-year period? b. What is the geometric average return over the 10-year period? c. If you invested $100 at the beginning, how much would you have at the end? a. What is the arithmetic average return over the 10-year period? The arithmetic average return over the 10-year period is 8.05 %. (Round to two decimal places.) b. What is the geometric average return over the 10-year period? First find the future value of investing $1 today, using the following formula: FV= $1x ( (1+R1) *(1+R2) * R (1+RT)) X... X 1 + Then use the following formula and solve for R: FV= $1*(1 + R) 10 The geometric average return, R, over the 10-year period is %. (Round to four decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Personal Finance A Practical Guide For Students

Authors: Lien Luu, Jonquil Lowe, Jason Butler, Tony Byrne

1st Edition

1138692956, 978-1138692954

More Books

Students also viewed these Finance questions