An Investor Has Earned 2%,12% and -10% on Equity Investments

question 10

Multiple Choice

An investor has earned 2%,12% and -10% on equity investments in successive years (annually compounded) .This is equivalent to earning which of the following annually compounded rates for the three year period.

• A) 1.33%
• B) 1.23%
• C) 1.13%
• D) 0.93%

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Definitions:

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of no exposure to the conditioned stimulus.

Generalization

The process by which individuals apply knowledge or behavior learned in one context to different but similar contexts.

Discrimination

Discrimination is the unfair or prejudicial treatment of people based on characteristics such as race, age, sex, or disability instead of individual merit.