Your Portfolio Has Provided You with Returns of 8

question 14

Multiple Choice

Your portfolio has provided you with returns of 8.6 percent, 14.2 percent, -3.7 percent, and 11.4 percent over the past four years, respectively. What is the geometric average return for this period?

• A) 7.25 percent
• B) 7.40 percent
• C) 7.57 percent
• D) 7.63 percent
• E) 7.78 percent

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Definitions:

Efficiency Wage Model

A theory suggesting that higher wages lead to increased productivity by attracting higher quality workers and motivating all workers to avoid being fired.

Level of Employment

Refers to the number of people employed in the economy at any given time, influencing overall economic output.

Electronic Devices

Gadgets that operate on electrical energy, including computers, smartphones, and household appliances.

No Shirking Constraint

A concept in labor economics that suggests higher wages motivate employees to work harder, reducing shirking on the job.