Quantitative Methods Q100

100A portfolio has the following annual returns: 5%, 11%, -6%, 0%. The geometric mean across the four-year period is closest to:

Option : A
Explanation : The geometric mean return is calculated as = [(1 + 0.05) × (1 + 0.11) × (1 − 0.06) × (1 + 0.00)]0.25 − 1 = 0.0231 ~ 2.3%

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