The Returns on Your Portfolio Over the Last 5 Years

question 31

Multiple Choice

The returns on your portfolio over the last 5 years were -5%,20%,0%,10% and 5%. What is the arithmetic average return?

• A) 5.0%
• B) 6.0%
• C) 7.5%
• D) 8.0%
• E) 10.0%

---

Definitions:

Operating Activity

Business actions directly related to the day-to-day operations, such as selling products or services, which generate most of the company’s cash flows.

Depreciation Expense

The allocated cost of an asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Comparative Balance Sheet

A financial statement displaying the balance of assets, liabilities, and equity for two or more time periods side by side, facilitating trend analysis and financial comparison over time.

Financing Activities

Activities that result in changes in the size and composition of the equity capital or borrowings of the entity, as reported in the cash flow statement.