The Return Earned in a Typical Year Over a Multiyear

question 38

Multiple Choice

The return earned in a typical year over a multiyear period is called the ________ average return.

• A)arithmetic
• B)standard
• C)variant
• D)geometric
• E)real

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Definitions:

Survivorship Bias

The logical error of concentrating on the people or things that "survived" some process and inadvertently overlooking those that did not because of their lack of visibility.

Investment Decisions

The process of deciding where to allocate resources in order to achieve the highest possible return.

Poor Performing Funds

Funds that consistently generate returns below their benchmark or peer group averages over a specified period.

Category

A classification or grouping based on common characteristics or types, used to organize items or concepts for easier analysis and comparison.