The Geometric Mean Will, in All but a Few Extreme

question 82

True/False

The geometric mean will, in all but a few extreme circumstances, yield a larger return than the arithmetic mean return.

---

Definitions:

Ending Balance

The amount of money in an account at the end of an accounting period, after all debits and credits have been accounted for.

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence but not full control.

Excess Consideration

The amount paid over and above the fair value of net assets acquired in a business acquisition.

Goodwill

An intangible asset that arises when a business is acquired for more than the sum of its identifiable net assets.