Unless every year's return is identical, the geometric average return …

Question

Unless every year's return is identical, the geometric average return is:

Accepted Answer

C. Smaller

1. Volatility drags compounded growth down.
2. The arithmetic mean ignores that drag.
3. So the geometric average is smaller.
_Source: OpenStax Principles of Finance, Chapter 15, Risk and Return._

Answer

Equal

Answer

Odder

Answer

Bigger

Unless every year's return is identical, the geometric average return is:

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