Question

Calculate the geometric return for security b.

A          B       C      MKT

12.05 18.23 12.82 12.28

15.27    8.24    5.82   5.99

4.12     4.71     1.58   2.41

-1.57 -6.56   -9.36 -4.48

13.16 15.13 12.45   13.41

Answer 1

Geometric return is calculated to know the return over the period of time on investment. Geometric return is an average of the returns on an investment that are compounded over multiple periods.

I have rounded-off the final return to 4 decimal places.

Do let me know in the comment section below if you have any doubt.