Knowee
Questions
Features
Study Tools

The Geometric Mean of the following series of returns is:0.17; -0.18; 0.02; -0.05; 0.10

Question

The Geometric Mean of the following series of returns is:

0.17; -0.18; 0.02; -0.05; 0.10

🧐 Not the exact question you are looking for?Go ask a question

Solution

To calculate the geometric mean of a series of returns, follow these steps:

  1. Convert each return to a growth multiplier by adding 1. For example, a return of 0.17 becomes 1.17, a return of -0.18 becomes 0.82, and so on.

  2. Multiply all the growth multipliers together.

  3. Take the nth root of the result from step 2, where n is the number of returns in the series.

  4. Subtract 1 from the result from step 3 to convert back to a return.

Let's apply these steps to your series of returns:

  1. Convert to growth multipliers: 1.17, 0.82, 1.02, 0.95, 1.10

  2. Multiply together: 1.17 * 0.82 * 1.02 * 0.95 * 1.10 = 0.9227469

  3. Take the 5th root (since there are 5 returns): 0.9227469^(1/5) = 0.9855

  4. Convert back to a return: 0.9855 - 1 = -0.0145 or -1.45%

So, the geometric mean of the series of returns is -1.45%.

This problem has been solved

Similar Questions

Over a 4-year period, a portfolio has returns of 10%, −2%, 18%, and −12%. The geometric mean return across the period is closest to:

The mean of the geometric distribution is given by _____________.Question 3Answera.npb.1/pc.p

The most appropriate "mean" to use when calculating the mean annual return from an investment portfolio over a 10-year period is: The most appropriate "mean" to use when calculating the mean annual return from an investment portfolio over a 10-year period is: Geometric mean Arithmetic mean Weighted mean Harmonic mean

The mean of first 3 terms is 14 and the mean of next 2 terms is 18. The meanof 5 numbers is -(a) 14.5(b) 15(c) 14(d) 15.6

A list of 10 data values is shown.6, 8, 16, 4, 17, 26, 8, 5, 5, 5What is the mean of these data?

1/2

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.