Question

The geometric average return answers the question What was your return in an average year over a particular period?

A. What was your average compounded return per year over a particular period?
B. What is the best method to use to calculate your average return?
C. What is the least amount of returns need to calculate an average?
D. What was your average return per year over a particular period

Answer 1

Answer: A. What was your average compounded return per year over a particular period?

Step-by-step explanation:

Geometric return is calculated by the formula;

= [(1 + r1) * (1 + r2) * (1 + r3) *.... (1 + rn)] ^1/n

This allows for one to calculate the compounding effect over a period of time by showing the compounded annual growth rate which means that it tells what the average compounded return was per year in a particular period.