Which of the Following Statements Is FALSE

question 45

Multiple Choice

Which of the following statements is FALSE?

• A) The geometric average return is a better description of the long-run historical performance of an investment.
• B) The geometric average return will always be above the arithmetic average return, and the difference grows with the volatility of the annual returns.
• C) The compounded geometric average return is most often used for comparative purposes.
• D) We should use the arithmetic average return when we are trying to estimate an investment's expected return over a future horizon based on its past performance.

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Definitions:

Self-Starvation

An eating disorder behavior characterized by the refusal to maintain a healthy body weight by deliberately starving oneself, often associated with conditions like anorexia nervosa.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight, leading to severe restriction of food intake and often distorted body image.

Peripheral Edema

Swelling caused by excess fluid trapped in the body's tissues, commonly occurring in the ankles, feet, and legs.

Bulimia Nervosa

An eating disorder characterized by episodes of binge eating followed by compensatory behaviors such as purging to prevent weight gain.