Question: Over the last three years Sally the investor earned the

Over the last three years, Sally the investor earned the following returns on her portfolio (assume that all dividends were reinvested in the portfolio, and are reflected in the stated returns): +35% (year 1), -20% (year 2), and +5% (year 3). What was Sally’s effective, annual, (compounded) return over this three year period? If Sally requires an annual return of 5% to be happy, is she happy?




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  • CreatedAugust 05, 2013
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