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Because the Simple Arithmetic Return Does Not Consider Compounding,its Value

question 43

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Because the simple arithmetic return does not consider compounding,its value will always be less than the geometric average return,unless the annual rates of return are constant.

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Definitions:

Schist

A shiny, foliated, metamorphic rock generally containing abundant visible crystals of mica.

Thrust Fault

A type of fault where the hanging wall moves up relative to the footwall, often associated with the compression of Earth's crust.

Normal Fault

A type of geological fault where the hanging wall has moved downward relative to the footwall, usually due to extensional forces.

Cleavage

In geology, the tendency of a mineral to break along flat, parallel surfaces determined by its crystal structure.

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