An Investment Had the Following 4 Year Returns: -8%, 15

question 43

Multiple Choice

An investment had the following 4 year returns: -8%, 15%, 10% and -5%. Determine the average annual rate of return.

• A) 2.54%
• B) 3.61%
• C) 3.85%
• D) 4.03%
• E) 4.92%

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Definitions:

Fundamentally Different Industries

are industries that vary greatly in their nature, operations, market dynamics, and regulatory environments.

Expected Return

The anticipated amount of profit or loss an investment generates, based on historical data or probabilistic estimates.

Dividend

A payout to shareholders from a company's earnings, reflecting the company's earning power and success.

Stock Price

The current price at which a share of a company is being traded on the stock market.