Which of the Following Statements Is FALSE

question 57

Multiple Choice

Which of the following statements is FALSE?

• A)The compounded geometric average return is most often used for comparative purposes.
• B)We should use the arithmetic average return when we are trying to estimate an investment's expected return over a future horizon based on its past performance.
• C)The geometric average return will always be above the arithmetic average return and the difference grows with the volatility of the annual returns.
• D)The geometric average return is a better description of the long-run historical performance of an investment.

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Definitions:

Justification

A reason, fact, circumstance, or explanation that validates or defends an action, decision, or belief.

Market Leader

A company or brand that has the highest sales or market share in a particular industry, sector, or market.

Monopolization

The act of acquiring or maintaining exclusive control over the supply or trade in a service or commodity, often considered illegal under anti-trust laws.

Market Share

represents the percentage of an industry's sales that is controlled by a particular company, indicating its strength in the market.