A Mutual Fund Reported the Following Annual Returns: 8%, -3

question 32

Essay

A mutual fund reported the following annual returns: 8%, -3%, 21%, 10%, and 12%.
What compound rate of return did it earn over the five-year period? What was its
annualized compound rate of return?

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Definitions:

AASB 108

The Australian Accounting Standards Board standard outlining the procedures for making accounting policy changes, correcting errors, and making estimates.

Misstatements

A misstatement in financial information is an error, intentional or not, that causes financial statements to deviate from the true financial position, performance, or cash flows of an entity.

Economic Decisions

Choices made by individuals, firms, or governments regarding allocation of resources to satisfy needs and desires, often involving trade-offs.

Going Concern Basis

An accounting principle that assumes a business will continue to operate and remain solvent in the foreseeable future.