C 8.43 3.12 12.58 3.87 -1.45 -6.59 Calculate the Geometric return of Security C

Question

Question

C

8.43

3.12

12.58

3.87

-1.45

-6.59

Calculate the Geometric return of Security C

Answer 1

Answer #1

Let the returns be denoted by Rn

Given, R1 = 0.0843
R2 = 0.0312
R3 = 0.1258
R4 = 0.0387
R5 = -0.0145
R6 = -0.0659

Hence, Geometric Return = ((1+R1)(1+R2)(1+R3)(1+R4)(1+R5)(1+R6))^1/6 - 1

= ((1+0.0843)(1+0.0312)(1+0.1258)(1+0.0387)(1- 0.0145)(1- 0.0659))^1/6 - 1

= 0.0314 = 3.14%

Answer 2

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