Over a 25-Year Period an Asset Had an Arithmetic Return

question 74

Multiple Choice

Over a 25-year period an asset had an arithmetic return of 13.1 percent and a geometric return of 12.6 percent. Using Blume's formula, what is your best estimate of the future annual returns over the next 10 years?

• A) 11.18 percent
• B) 13.04 percent
• C) 11.84 percent
• D) 12.91 percent
• E) 12.46 percent

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Definitions:

Evolutionarily Unique

Describes traits, behaviors, or characteristics that have developed in a species and set it apart from others in the evolutionary history.

Bipedalism

The ability to walk on two legs, a key characteristic distinguishing humans and their ancestors from other primates.

Brain-to-Body-Mass Ratio

A measure comparing the weight of an animal's brain to its body weight, often used to make inferences about the potential for intelligence and complex behaviors.

Evolutionary Processes

The natural mechanisms through which species undergo change over time, involving variations in traits that are heritable and can influence reproductive success.