The Geometric Return on an Asset Over the Past 12

question 70

Multiple Choice

The geometric return on an asset over the past 12 years has been 14.50 percent. The arithmetic return over the same period was 14.96 percent. What is the best estimate of the average return on this asset over the next 5 years?

• A)14.47%
• B)14.67%
• C)14.79%
• D)14.88%
• E)14.86%

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Voidable

A legal term for a transaction or agreement that is valid and enforceable on the surface but may be declared void by one or more of the parties involved.