Over a 34-Year Period an Asset Had an Arithmetic Return

question 36

Multiple Choice

Over a 34-year period an asset had an arithmetic return of 13 percent and a geometric return of 10.5 percent. Using Blume's formula, what is your best estimate of the future annual returns over the next 10 years?

• A)11.18 percent
• B)11.27 percent
• C)11.84 percent
• D)12.32 percent
• E)12.46 percent

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Definitions:

Freud

Sigmund Freud, an Austrian neurologist who founded the field of psychoanalysis, a form of psychotherapy that emphasizes the role of unconscious factors in personality and behavioral development.

Preconscious Mind

A part of the mind that contains thoughts, memories, and feelings that are not currently in conscious awareness but can easily be brought to consciousness.

Recallable Material

Information or data that can be brought back into one's conscious mind, retrieved from memory.

Awareness

The ability to perceive, feel, or be conscious of events, objects, thoughts, emotions, or sensory patterns.