Explore Westonci.ca, the premier Q&A site that helps you find precise answers to your questions, no matter the topic. Experience the ease of finding quick and accurate answers to your questions from professionals on our platform. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Calculate the geometric average return earned by an investor over three years if she earned 6% in the first year of an investment, 12% in the second year and 10% in the third year.

Sagot :

Answer:

8.96%

Explanation:

[tex]\sqrt[\frac{1}{n} ]{x1. x2.x3...}[/tex] = geometric average return

n = number of observations

x1 = observations

(0.06 x 0.12 x 0.1)^(1/3) = 0.0896 = 8.96%