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:

Question

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:
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Solution 1

To calculate the geometric mean return, we first need to convert each year's return into a multiplicative factor. We do this by adding 1 to each return (expressed as a decimal).

For the first year, the return is 10%, so the factor is 1 + 0.10 = 1.10. For the second year, the return is -2%, so the Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv

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