Sally is reviewing the performance of several portfolios in the family trusts. Trust A is managed by Wall Street Investment Advisors and Trust B is managed by LaSalle Street Investment Advisors. Both trusts are invested in a combination of stocks and bonds and have the following returns:
a. Calculate the annualized geometric and arithmetic returns over this 5-year period.
b. Which manager performed the best, and is there a significant enough difference for Sally to move her money to the winning manager?
c. Explain the difference between the geometric and arithmetic returns.

  • CreatedSeptember 21, 2015
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