An investment has returned 10%, 1%, -1%, 0%, and 16% in each of the last five...

An investment has returned 10%, 1%, -1%, 0%, and 16% in each of the last five years. If we decide to use historical returns as a proxy for expected future returns, what is the expected rate of return?

Expert Solution

Ans 5.20

YEAR	RETURN
1	10
2	1
3	-1
4	0
5	16
Total	26


Expected Return =	Total Return / NO of years
	26 / 5
	5.20

jeff jeffy answered 3 years ago

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