Which returns assumes that the amount invested at the beginning of each period is the same
Question
Which returns assumes that the amount invested at the beginning of each period is the same
Solution
The type of return that assumes the amount invested at the beginning of each period is the same is known as the Geometric Mean Return. This type of return is commonly used in the context of investments that are regularly made, such as in a retirement account. The geometric mean return takes into account the compounding that occurs from period to period, which can have a significant impact on the overall return.
Here are the steps to calculate it:
- First, calculate the return for each
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