$\begin{array}{|c|c|}
\hline \text { Year } & \begin{array}{c}
\text { Return } \
\mathbf{( \% )}
\end{array} \
\hline \text { Year } 1 & 7 \% \
\hline \text { Year } 2 & 17 \% \
\hline \text { Year } 3 & -2.4 \% \
\hline \text { Year } 4 & 2 \% \
\hline
\end{array}$
-The value of an investment at the end of each of four years is shown above.What is the geometric cumulative return over the four years?
A) $15.1 \%$
B) $24.63 \%$
C)$18.7 \%$
D) $19.7 \%$

Question

Quizplus · Accepted Answer

Using equation 1.12,page 18,the geometric return over the four years is calculated as: [(1 + 0.07)(1 + 0.17)(1 - 0.024)(1 + 0.02)- 1] = 0.2463 or 24.63% (Example 1.9)

-The Value of an Investment at the End of Each