A Portfolio Earned 20%, -20%, 0%, 20%, and -20% in Five

question 194

Short Answer

A portfolio earned 20%, -20%, 0%, 20%, and -20% in five successive years. What was the portfolio's five-year equivalent annually compounded rate of return?

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Definitions:

Mutual Fund

An investment vehicle composed of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, and other assets.

Stock Market Index

A statistical measure that reflects the composite value of a selected group of stocks, representing a segment of the stock market.

Supply Of Corn

The total quantity of corn that producers are willing and able to sell at a given price level.

Price Of Corn

The cost at which corn is bought or sold, subject to fluctuations based on agricultural trends and economic conditions.