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A compounded annual return worked out from the effective annual rate is also known as the:

AWeighted average return
BGeometric average return
CSimple average return
DNominal average return
Answer & Solution
Correct answer: B. Geometric average return
1. Compounding is built in. 2. It is not a plain arithmetic mean. 3. It is the geometric average return. _Source: OpenStax Principles of Finance 2e, Chapter 15, How to Think about Investing._
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