Calculate the geometric return of an investment with five year returns of 15%, 10%, 5%, (5%) and (10%).

Name: Calculate the geometric return of an investment with five year returns of 15%, 10%, 5%, (5%) and (10%).
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Question

Quizplus · Accepted Answer

The geometric return is calculated by taking the nth root of the product of (1 + return rate) for each year, where n is the number of years. In this case, n = 5.Geometric return = (1 + 0.15) * (1 + 0.10) * (1 + 0.05) * (1 + -0.05) * (1 + -0.10))^(1/5) - 1= 1.1357 - 1= 0.1357 or 13.57%

Calculate the Geometric Return of an Investment with Five Year