Calculate the Arithmetic Return of an Investment with Five Year

question 87

Multiple Choice

Calculate the arithmetic return of an investment with five year returns of 10%, 6%, 4%, 2% and (10%) .

• A) 7.32%
• B) 8.32%
• C) 9.32%
• D) 10.32%
• E) 11.32%

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Definitions:

Real Estate Boom

A period during which the prices and demand for real estate significantly rise.

Budget Constraint

Describes the combinations of goods and services that a consumer can purchase given their income and the prices of these goods and services.

House Prices

The monetary value assigned to residential properties, influenced by factors like location, size, and market conditions.

Endowment

An investment fund established by a foundation that makes consistent withdrawals from invested capital, often used by universities, nonprofits, and churches.