USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The common stock of XMen Inc. had the following historic prices.

-Refer to Exhibit 1.3. What was your geometric mean annual yield for the investment in XMen?
A) 0.25
B) 0.40
C) 1.8
D) 0.1247
E) 0.1462

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
The common stock of XMen Inc. had the following historic prices.
 
-Refer to Exhibit 1.3. What was your geometric mean annual yield for the investment in XMen?
A) 0.25 
B) 0.40 
C) 1.8 
D) 0.1247 
E) 0.1462

Quizplus · Accepted Answer

The geometric mean annual yield, often used to calculate average returns on investments that are compounded over time, is found using the formula $\sqrt[n]{(1+r_1)(1+r_2)...(1+r_n)} - 1$, where $r$ represents each year's return and $n$ is the number of years. Without the specific returns (r values) for the investment in XMen provided in the question, the correct answer cannot be precisely calculated based on the information given. However, given the options, the geometric mean is typically less than the arithmetic mean when there are fluctuations in the returns, and it accounts for compounding. The value 0.1247 (D) seems to be a plausible geometric mean annual yield rate, assuming it's based on typical investment return rates over multiple periods.