The geometric average of -20%, 20%, and 25% is

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Expert Solution

Geometric average = [(1 + r1) × (1 + r2) × (1 + r3)]^1/3 − 1

Geometric average = [(1 - 0.20) × (1 + 0.20) × (1 + 0.25)]^(1/3) - 1

Geometric average = 0.0627 or 6.27%

jeff jeffy answered 2 years ago

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