Suppose a Particular Investment Earns an Arithmetic Return of 10

question 28

Multiple Choice

Suppose a particular investment earns an arithmetic return of 10% in year 1,20% in year 2 and 30% in year 3.The geometric average return for the year period will be __________.

• A)greater than the arithmetic average return
• B)equal to the arithmetic average return
• C)less than the arithmetic average return
• D)equal to the market return
• E)cannot tell from the information given

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Definitions:

Accrued Revenue

Revenue earned but not yet received in cash or recorded at the statement date, usually recognized in accrual basis accounting.

Snow Removal Services

Companies or departments dedicated to clearing snow and ice from outdoor surfaces, such as roads and walkways, to ensure safety and accessibility.

Adjusting Entries

Entries recorded at the conclusion of an accounting period to adjust the account balances prior to the creation of financial statements.

Revenue And Expense

Key components of an income statement, with revenue representing income earned and expense depicting costs incurred in generating that income.