The average compound return earned per year over a multiyear period is called the ________ average return.
A) arithmetic
B) standard
C) variant
D) geometric
E) real

Question

Quizplus · Accepted Answer

The average compound return earned per year over a multiyear period is called the geometric average return. The geometric average return takes into account the compounding effect of returns over time and is a more accurate measure of investment performance than the arithmetic average return. Therefore, the best choice is D, geometric.

The Average Compound Return Earned Per Year Over a Multiyear