An Investor Has Earned 2%,12% and -10% on Equity Investments

question 10

Multiple Choice

An investor has earned 2%,12% and -10% on equity investments in successive years (annually compounded) .This is equivalent to earning which of the following annually compounded rates for the three year period.

• A) 1.33%
• B) 1.23%
• C) 1.13%
• D) 0.93%

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Definitions:

Independent Variable

The variable manipulated by the researcher that is assumed to lead to changes in the dependent variable.

"Knew It All Along" Phenomenon

Also known as hindsight bias, it's the tendency to believe, after learning an outcome, that one would have predicted it, or known it was going to happen.

Methodological Crisis

a situation in a field of study marked by a questioning of traditional research methods and the validity of their results, often leading to reforms.

.05 Level Of Significance

A statistical threshold indicating that the probability of the observed results occurring by chance is 5% or less, suggesting that the results are statistically significant.