You have the following rates of return for a risky portfolio for several recent years:
2008 - 35.23%
2009 - 18.67%
2010 - -9.87%
2011 - 23.45%
A. 16.15%
B. 16.87%
C. 21.32%
D. 15.60%
Answer: D. 15.60%
(1.17856)1/4 - 1 = 15.60%
2008 - 35.23%
2009 - 18.67%
2010 - -9.87%
2011 - 23.45%
The annualized (geometric) average return on this investment is _____.
A. 16.15%
B. 16.87%
C. 21.32%
D. 15.60%
Answer: D. 15.60%
(1.17856)1/4 - 1 = 15.60%