When looking at the historical record of returns from 1926-2016, we find that on average there is a positive risk premium for all asset classes analyzed. This observation provides support to the notion that: finance is difficult there is a reward for bearing risk real returns are large riskless rates there is a risk-return tradeoff You invested $5,000 eight years ago. The arithmetic average return on your investment is 10.6 percent and the geometric average return is 10.23 percent. What is the value of your portfolio today? $10,899 $9,092 $11,195 $11,195. You selected this answer. $10,623 $10,947