The geometric average annual return for a large capitalization stock portfolio is 10% for ten years and 6% per year for the next five years. The geometric average annual return for the entire 15 year period is ________.
A) 9.08%
B) 8.65%
C) 8.22%
D) 9.52%

Question

Quizplus · Accepted Answer

B) 11ea84dc_f539_0e24_9a63_6b4ae8719e4e_TB1316_00_TB1316_00 11ea84dc_f539_0e25_9a63_8349f11fcb2b_TB1316_00_TB1316_00 total return over 15 years = 2.5937 × 1.3382 = 3.4710; 11ea84dc_f539_0e26_9a63_6dfb1db13192_TB1316_00_TB1316_00 geometric average annual return = 8.65%

The Geometric Average Annual Return for a Large Capitalization Stock