Asked by Diana Stevenson on May 11, 2024
Verified
A portfolio earned 20%, 15%, -10%, 25%, and -5% in five successive years. What was the portfolio's five-year equivalent annually compounded rate of return?
Annually Compounded
Interest on an investment that is calculated and added to the principal sum once a year.
Rate of Return
The positive or negative change in the worth of an investment, quantified over a predetermined period and depicted as a percentage of the initial investment cost.
Portfolio
A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including mutual funds and ETFs.
- Determine the investment return rate factoring in semiannual and quarterly compounding frequencies.
Verified Answer
AS
Learning Objectives
- Determine the investment return rate factoring in semiannual and quarterly compounding frequencies.