Joe Smith's IRA at the End of 2007 Had a Value

question 43

Essay

Joe Smith's IRA at the end of 2007 had a value of $1.2 million.With a rate of return of -29.75 percent in 2008 and a rate of return of 2.98 percent in 2009,calculate the geometric mean rate of return for the two-year period.

---

Definitions:

Gasoline

A volatile, flammable liquid primarily used as fuel in internal combustion engines.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity demanded, hence, the market is in balance.

Market Price

The ongoing rate at which an asset or service is being offered for buying or selling.

Shortage

An instance where the desire for a good or service outstrips its availability at a given price.