The Geometric Mean of a Series of Returns Is Always

question 16

True/False

The geometric mean of a series of returns is always larger than the arithmetic mean, and the difference increases with the volatility of the series.

---

Definitions:

Indirect Expenses

Costs that are not directly linked to a specific product or service, such as utilities and administrative salaries.

Cost Center

A division or a department within an organization that does not directly contribute to profit but incurs costs.

Joint Cost

The cost incurred in the process of producing two or more joint products before the point where these products are separately identifiable.

Investment Center

A segment or division within a company for which direct responsibility is given to a manager, who is judged by the profitability and the return on investment of the division.