Question: how did we find HPRavg?? Geometric Average An example: You have the following rates of return on a stock: 2000 -21.56% 2001 44.63% 2002 23.35%

how did we find HPRavg??

Geometric Average An example: You have the following rates of return on a stock: 2000 -21.56% 2001 44.63% 2002 23.35% 2003 20.98% 2004 3.11% 2005 34.46% 2006 17.62% 11n With compounding (geometric average or GAR: Geometric Average Return): HPR (1+HPRT) T.1 HPR = (0.7844x1.4463x1.2335x1.2098x1.0311x1.3446x1.1762) -1 = 15.61% ang GAR = 15.61% 5.9 lculations to at least four decimal places)

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