Question: A.4. Compare geometric average with arithmetic average of a set of historical returns. Which is always higher and why? (5 marks) A.5. What are the

A.4. Compare geometric average with arithmetic average of a set of

A.4. Compare geometric average with arithmetic average of a set of historical returns. Which is always higher and why? (5 marks) A.5. What are the two components of total risk? Use a diagram to identify the effect of diversification on the components of total risk (ignore transaction costs)

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