Determine the compound annual growth rate

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Reference no: EM1352196

1. Consider an investment with the following returns over four years:

1 2 3 4
10% 20% -5% 15%

a. What is the compound annual growth rate (CAGR) for this investment over the 4 yrs?

b. What is the average annual return of the investment over the 4 years?

c. Which is a better measure of the investment's past performance?

d. If the investment's returns are independent and identically distributed, which is a better measure of the investment's expected return next year?

Reference no: EM1352196

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