Your Portfolio Has Provided You with Returns of 8

question 24

Multiple Choice

Your portfolio has provided you with returns of 8.6 percent,14.2 percent,-3.7 percent,and 12.0 percent over the past four years,respectively.What is the geometric average return for this period?

• A)7.25 percent
• B)7.54 percent
• C)7.57 percent
• D)7.63 percent
• E)9.55 percent

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Definitions:

Balanced Budget Amendment

A proposed federal constitutional rule requiring that the government not spend more than its income in a fiscal year.

Crowding-out Effect

A situation where increased government spending leads to reduced investment in the private sector.

Government Borrowing

The process by which governments finance their expenditures by issuing debt instruments, such as bonds, to the public or borrowing from financial institutions.

Great Recession

A severe global economic downturn that began in 2007 and lasted until 2009, marked by significant declines in financial markets and economic activity worldwide.