Black Stone Mines Stock Returned 8, 16, -8, and 12

question 44

Multiple Choice

Black Stone Mines stock returned 8, 16, -8, and 12 percent over the past four years, respectively. What is the geometric average return?

• A) 6.59 percent
• B) 7.36 percent
• C) 7.75 percent
• D) 9.94 percent
• E) 10.33 percent

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Definitions:

Discount Factor(s)

A multiplier used in discounted cash flow analysis to determine the present value of future cash flows, reflecting the time value of money.

Discount Rate

Discount rate is the interest rate used to determine the present value of future cash flows, essential in evaluating investment opportunities and financial decisions.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of investments.

Discount Factor(s)

A multiplicative factor used to calculate the present value of future cash flows by accounting for the time value of money.