The Value Line Index Is an Equally-Weighted Geometric Average of the Returns

question 53

Multiple Choice

The Value Line Index is an equally-weighted geometric average of the returns of about 1,700 firms. The value of an index based on the geometric average returns of three stocks where the returns on the three stocks during a given period were 32%, 5%, and −10%, respectively, is

• A) 4.3%.
• B) 7.6%.
• C) 9.0%.
• D) 13.4%.
• E) 5.0%.

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