Question: What is the difference between the average annual return for a fund and the geometric mean return for that fund?

What is the difference between the average annual return for a fund and the geometric mean return for that fund?

Step by Step Solution

★★★★★

3.32 Rating (176 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Standard practice in the mutual fund industry is to calculate and present ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

650-B-A-I (7271).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

What is the difference between the average cost method and the first-in, first-out (FIFO) cost method?

Q:

What is the difference between the simple arithmetic average return and the geometric average return? Under what circumstances is it appropriate to use each method?

Q:

What is the difference between the yield spread to average life and the option-adjusted spread on mortgage-backed securities?

Q:

What is the average annual return observed over this period (hint: geometric mean)? Use the following information to answer Questions 1 and 2: You purchased one share of FSLR (First Solar 5 years...

Q:

You purchased one share of FSLR (First Solar) 5 years ago. Below are the annual returns of FSLR over the past Year Return96 1 5 -4 9 -3 5 13 What is the average annual return observed over this...

Q:

This is a continuation of my previous question. 2. What is the average annual return on Susan's fund? 3. What is the average annual return on Bob's fund? Show your work below. 4. Assume that the...

Q:

Question 2: If you invested $10,000 in FXAIX ten years ago [9/30/2010], how much would it be worth on 9/30/2020? [HINT: Hover over the date until you get to 9/30/2020.] Question 3: What was its...

Q:

Let's invest in international equities! Log onto www.fidelity.com News & Research (third tab at the top] Mutual Funds [fifth tab at the left] For Asset Class, click on International Equity For...

Q:

Show the formula and the answer. Answer all the questions. its just one question . . Let's invest in international equities Log onto www.fideity.com News & Research third tab at the top Mutual Funds...

Q:

Top Row, Research, then scroll down to Mutual Funds (4 th down). Q1: Which of the following asset classes is the riskiest? A) Money Market B) Municipal Bonds C) Taxable Bonds D) US Equity E)...

Q:

The Cadillac Motor Car Company is advertising a 24-month lease of a Cadillac Deville for $520 payable at the beginning of each month. The lease requires a $2,500 down payment plus a $500 refundable...

Q:

If managers are compensated, in part, on the basis of a bonus based on accounting earnings, they are likely to object to any tax plans that reduce reported earnings. What actions could the firm take...

Q:

a m 2 ( i ) Help Sove 5 cm During the 1 9 2 7 - 2 0 2 2 period the Sharpe ratio was greatest for which of the following asset classes? Multiple Choice Small / growth US . stocks Bigivalue US . stocks...

Q:

Which of the following is not true about the market interest rate? a. Investors demand it in order to loan their money. b. it is a fixed rate. c. It is also known as effective interest rate. d. It...

Q:

A client retained the Conservative Management Company to manage funds on an indexed basis. The benchmark selected was the Lehman Brothers U.S. Aggregate index. In each of the first four quarters, the...

Q:

The following table repeats the annual total returns on the MSCI Germany Index previously given (see CFA Question 6-2) and also gives the annual total returns on the JP Morgan Germany 5- to 7-year...

Q:

a. Which fund's returns are best explained by the market's returns? Consider the five funds shown below: b. Which fund had the largest total risk? c. Which fund had the lowest market risk the...

Q:

Modigliani & Miller show that dividend policy can also be considered irrelevant. Yet, unexpected increases in dividends are often closely followed by price increases, why? To clarify, when a firm...

Q:

An investor purchases a 1 1 - year, 8 . 9 % annual coupon payment bond at a price equal to par value. After the bond is purchased and before the first coupon is received, interest rates increase by 1...

Q:

Income statement preparation Adam and Arin Adams have collected their personal income and expense information and have asked you to put together an income and expense statement for the year. The...