Geometric average is higher than or equal to the arithmetic

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Reference no: EM131504828

All of the following statements are false. Please change the incorrect parts to make them true. DO NOT negate the sentence, unless necessary.

1. Suppose you invest only the same amount of money at the beginning of every month, and rebalance your portfolio at the end of every month. The geometric average is the appropriate measure to compute the actual monthly average return.

2. Suppose you do not the rebalancing strategy, and maintain your portfolio throughout your holding period. The arithmetic average is the appropriate measure to compute the actual monthly average return.

3. The geometric average is higher than or equal to the arithmetic average.

4. Value-at-risk measures the average return among the returns that lie below the q-th percentile, while expected short-fall measures the return at the q-th percentile.

Reference no: EM131504828

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