A Portfolio Manager Generates a 5% Return in Year 1

question 103

Multiple Choice

A portfolio manager generates a 5% return in Year 1, a 12% return in Year 2, a negative 6% return in Year 3, and a return of 2% in Year 4. The annualized return for the entire period is the closest to ________.

• A) 3.05%
• B) 3.25%
• C) 3.50%
• D) 3.77%

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Definitions:

Waterways

Natural or man-made bodies of water, used for transportation, power, or irrigation.

Supremacy Clause

A principle in the U.S. Constitution that states federal laws and treaties have authority over conflicting state laws.

U.S. Constitution

The foundational document of the United States, outlining the framework of government and the rights of its citizens.

Supreme Court

The highest judicial body in a country or state, which has the ultimate authority to adjudicate appeals, interpret laws, and sometimes decide on the constitutionality of laws.