The Investment Company Institute reported in its Mutual Fund Fact Book that the number of mutual funds increased from 410 in 1990 to 857 in 2000. What is the geometric mean annual percent increase in the number of funds?
A) 1.12
B) 7.65
C) 19.41
D) 48.66
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The geometric mean annual percent increase can be calculated using the formula: [(Ending Value/Beginning Value)^(1/Number of Years)] - 1. Here, [(857/410)^(1/10)] - 1 = 0.0765 or 7.65%.

The Investment Company Institute Reported in Its Mutual Fund Fact