Using the information provided in the previous question, what is the geometric mean return on the investment?
A) -2.6%
B) +2.6%
C) +5.0%
D) +8.0%
E) Cannot be calculated from the information provided

Question

Quizplus · Accepted Answer

The geometric mean return is calculated by taking the nth root of the product of (1 + return rate) over n periods. In this case, we have a return rate of -5% for one period, so the geometric mean return is (1 - 0.05)^1 = 0.95, or -5%.

Using the Information Provided in the Previous Question, What Is