Which One of the Following Best Describes an Arithmetic Average

question 30

Multiple Choice

Which one of the following best describes an arithmetic average return?

• A)Total return divided by N - 1, where N equals the number of individual returns
• B)Average compound return earned per year over a multiyear period
• C)Total compound return divided by the number of individual returns
• D)Return earned in an average year over a multiyear period
• E)Positive square root of the average compound return

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Definitions:

Balance Sheet

A financial statement at a given point in time that shows assets on one side and liabilities and net worth on the other side; because assets must equal liabilities plus net worth, the two sides of the statement must be in balance.

Net Worth

The total assets minus total external liabilities of an individual or a company, indicating their overall financial position.

Liabilities

Financial obligations or debts owed by a company or individual to others, which must be settled over time through the transfer of economic benefits.

Non-Interest-Bearing Reserve Deposits

Bank reserves held in a central bank that do not earn any interest for the commercial bank.