Over a 30-Year Period an Asset Had an Arithmetic Return

question 5

Multiple Choice

Over a 30-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 5 years?

• A)11.18 percent
• B)12.27 percent
• C)11.84 percent
• D)12.66 percent
• E)12.46 percent

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Closing Interview

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