Suppose a Particular Investment Earns an Arithmetic Return of 10

question 20

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 year 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)Cannot tell from the information given

---

Definitions:

Factory Machines

Durable, industrial equipment used in the manufacturing process, critical to producing goods and services.

Paper Cupcake Liners

Disposable paper molds used to line the cups of muffin tins to prevent cupcakes from sticking to the pan.

Managerial Accounting Reports

Managerial accounting reports are internal financial reports that are tailored to the specific informational needs of a company's management, providing detailed insights on operational performance, costs, budgeting, and decision-making analyses.

GAAP

Generally Accepted Accounting Principles, which are a set of rules and standards used in financial reporting.