Versa Co share prices gave a realised return of 5%, 5%, -10%, and -10% over four successive quarters. What is the annual realised return for Versa Co for the year?

Question

Quizplus · Accepted Answer

To calculate the annual realised return, we need to use the following formula:
(1+R1) x (1+R2) x (1+R3) x (1+R4) - 1 = Annual Realised Return
Where R1, R2, R3, R4 are the quarterly returns.
Using the formula:
(1+0.05) x (1+0.05) x (1-0.10) x (1-0.10) - 1 = -0.107 = -10.70%
Therefore, the annual realised return for Versa Co for the year is -10.70%. The correct answer is C.

Versa Co Share Prices Gave a Realised Return of 5