The spreadsheet below contains the total returns for the S&P 500 Index for the years 2000-2009 in decimal form. This 10-year period has been called the "Lost Decade."
a. Calculate the average annual total return (geometric mean) for this index for this 10-year period. Interpret your result.
b. What was the cumulative wealth on December 31, 2009, per dollar invested on January 1, 2000?
c. What was the cumulative wealth on December 31, 2002, per dollar invested on January 1, 2000?
d. Given a $100 investment in the S&P 500 Index on January 1, 2000, in what year did this investment finally break above $100?
2000 ………………………. 0.9088
2001 ………………………. 0.8812
2002 ………………………. 0.7791
2003 ………………………. 1.2867
2004 ………………………. 1.1087
2005 ………………………. 1.0491
2006 ………………………. 1.1574
2007 ………………………. 1.0549
2008 ………………………. 0.63
2009 ………………………. 1.2646