Suppose a Particular Investment Earns an Arithmetic Return of 10

question 45

Multiple Choice

Suppose a particular investment earns an arithmetic return of 10% in year 1, 20% in year 2, and 30% in year 3. The geometric average return for the period will be

• A) greater than the arithmetic average return.
• B) equal to the arithmetic average return.
• C) less than the arithmetic average return.
• D) equal to the market return.
• E) It cannot be determind from the information given.

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Definitions:

Simple Effect

A statistical term that describes the effect of one factor at a specific level of another factor within an ANOVA test.

Marginal Mean

The average value of a variable across different levels of another variable, often used in the context of multivariate experiments and statistical analysis.

Men

Adult human males, often mentioned in socio-demographic and health-related research studies.

Means

Statistical measures that represent the average or central value of a data set by summing all the values and dividing by the number of values.