In: Finance
Your investment portfolio has the following annual returns over the last three years.
Year 1: -13%
Year 2: 6%
Year 3: 19%
The arithmetic average of these returns is: %
The time-weighted annualized return (i.e. geometric average) of these returns is: %
Please enter your answer with TWO decimal points.
Year | Return | |||
1 | -13% | |||
2 | 6% | |||
3 | 9% | |||
Total | 2% | |||
The arithmetic average of these returns | = | 2%/3 | ||
= | 0.67% | |||
The time weighted annual return | = | 4% | ||
(19%*/3+6%/3-13%/3) | ||||