Question
Your investment portfolio has yielded mixed results over the past 5 years. The annual portfolio returns over the period were as follows: 12.2%, 3.8%, -7.3%,
Your investment portfolio has yielded mixed results over the past 5 years. The annual portfolio returns over the period were as follows: 12.2%, 3.8%, -7.3%, 5.1%, -1.5%.
i) Calculate the arithmetic mean and provide two characteristics of the mean
ii) Calculate the geometric mean returns for the period. What is the main use of the geometric mean?
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
