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What Is the Annual Geometric Return for an Investor Who

question 35

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What is the annual geometric return for an investor who invests in a stock for 2 years if he earned 18% the first year and a negative 8% for the second?


Definitions:

Retention Ratio

This metric indicates the percentage of net income a firm retains to reinvest in its business rather than distributing to shareholders as dividends.

Dividend Payout Ratio

The fraction of earnings a company pays out to its shareholders in the form of dividends.

Cash Dividends

Distributions of a company's earnings to shareholders in the form of cash.

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