The Average Compound Return Earned Per Year Over a Multiyear

question 78

Multiple Choice

The average compound return earned per year over a multiyear period is called the ________ average return.

• A) arithmetic
• B) standard
• C) variant
• D) geometric
• E) real

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Definitions:

Opportunity Cost

The receipts from the next most valuable forgone alternative when making a decision or choice among many options.

Opportunity Cost

The value of the best alternative foregone where a choice needs to be made between several mutually exclusive alternatives.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Future Value

Value of cash flows at a future date, taking into account interest accumulated between when the cash flow occurred and the future date.