# Question

Consider an investment with the following returns over four years:

a. What is the compound annual growth rate (CAGR) for this investment over the four years?

b. What is the average annual return of the investment over the four years?

c. Which is a better measure of the investment’s past performance?

d. If the investment’s returns are independent and identically distributed, which is a better measure of the investment’s expected return nextyear?

a. What is the compound annual growth rate (CAGR) for this investment over the four years?

b. What is the average annual return of the investment over the four years?

c. Which is a better measure of the investment’s past performance?

d. If the investment’s returns are independent and identically distributed, which is a better measure of the investment’s expected return nextyear?

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