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Calculate the Arithmetic Return of an Investment with fiVe Year

question 81

Multiple Choice

Calculate the arithmetic return of an investment with five year returns of 10%, (15%) , 12%, 8% and (5%) .

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Definitions:

Risk

The potential for financial loss or gain in an investment due to various factors including market volatility.

Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables, ranging from -1 (perfect negative correlation) to +1 (perfect positive correlation).

Expected Return

The expected return is the anticipated profit or loss from an investment over a specified period, based on historical or projected rates.

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