Question 1
Multiple ChoiceConsider the following annual returns for Fund Z over the past five years:
Five-Year Annual Returns
Year 1 | 12%
Year 2 | -4%
Year 3 | 8.5%
Year 4 | 18.5%
Year 5 | 5.6%
Explanation
R_{g} = [(1 + 0.120) × (1 − 0.040) × (1 + 0.085) × (1 + 0.182) × (1 + 0.056)^{1/5} − 1]