Suppose a Particular Investment Earns an Arithmetic Return of 10

question 61

Multiple Choice

Suppose a particular investment earns an arithmetic return of 10% in year 1, 20% in year 2, and 30% in year 3.The geometric average return for the period will be

• A)greater than the arithmetic average return.
• B)equal to the arithmetic average return.
• C)less than the arithmetic average return.
• D)equal to the market return.

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Definitions:

Organic Designs

Describes an organizational structure that is more flexible and adaptable, typically characterized by loose, informal communication and decentralized decision making.

Span of Control

The number of subordinates or direct reports that a manager or supervisor can effectively oversee.

Subordinates

Employees or team members who are lower in rank or position and report to someone higher in the organizational hierarchy.

Direct Reporting

The process where employees report directly to their immediate supervisor without intermediaries.