Use the table for the question(s)below.
Consider the following realized annual returns:
-The geometric average annual return on the Index from 2000 to 2009 is closest to:
A)9.75%.
B)8.75%.
C)7.10%.
D)8.35%.

Question

Use the table for the question(s)below.
Consider the following realized annual returns: 
-The geometric average annual return on the Index from 2000 to 2009 is closest to:
A)9.75%. 
B)8.75%. 
C)7.10%. 
D)8.35%.

Quizplus · Accepted Answer

The geometric average annual return is calculated by taking the nth root of the product of (1 + each annual return), where n is the number of years, and then subtracting 1. The calculation for the given period results in approximately 7.10%.

Use the Table for the Question(s)below