The Rate of Return for Each of the Past Four

question 20

Essay

The rate of return for each of the past four years on a market fund are R₁ = 2.4%,R₂ = 1.0%,R₃ = −3.2%,and R₄ = 0.5%.Find the geometric mean rate of return.

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Definitions:

Accounts Receivable

Monetary amounts owed to a company by its customers for goods or services provided on credit.

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Fiscal Year

A twelve-month period used for accounting purposes and preparing financial statements, not necessarily aligning with the calendar year.

Indirect Method

A way to present the cash flow from operating activities by starting with net income and adjusting for changes in balance sheet items.