You made an investment of $100. Four years later the Investment is worth $175. What is...

Question

Question

You made an investment of $100. Four years later the Investment is worth $175. What is the a GEOMETRIC MEAN RETURN for this investment?

Answer 1

Answer #1

Geometric mean return = (Ending value / beginning value)^1/n - 1

Geometric mean return = (175 / 100)^1/4 - 1

Geometric mean return = (1.75)^1/4 - 1

Geometric mean return = 1.1502 - 1

Geometric mean return = 0.1502 or 15.02%

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Answer 2

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