Geometric mean returns are:

Question

Quizplus · Accepted Answer

Geometric mean returns are expressed as compound rates of interest, which take into account the compounding effect of returns over time. This makes them more accurate measures of investment performance than simple averages of holding period returns (A). Geometric mean returns also take into account the time intervals between returns, but they do assume that each interval is equally important (C), which may not always be the case. While geometric mean returns can be used in statistical studies spanning long periods of time (D), their accuracy may be affected by changes in the investment environment over such long periods.

Geometric Mean Returns Are