Over the Past 10 Years, a Small-Cap Fund and a Large-Cap

question 17

Multiple Choice

Over the past 10 years, a small-cap fund and a large-cap fund each reported an arithmetic mean return of 7%. Based on this information, the geometric mean return for the small-cap fund was most likely:

• A) less than 7% and exceeded the geometric mean return of the large-cap fund.
• B) less than 7% and was less than the geometric mean return of the large-cap fund.
• C) more than 7% and exceeded the geometric mean return of the large-cap fund.
• D) more than 7% and was less than the geometric mean return of the large-cap fund.

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Definitions:

Value Outlet

A retail store that offers products at lower prices by reducing overhead costs and offering goods that provide value for money.

Focused Merchandise Stores

Retail outlets that specialize in a specific type of product or market niche, aimed at catering to specific customer needs.

Specialty Discount Retailer

Retailers that focus on selling a specific category of products at reduced prices, often offering large selections in their niche.

Category Killer

A large retail store specializing in a specific product category, so dominant that it drives out or "kills" smaller competitors.