Calculate the geometric mean return for the following data set: (Negative value should be indicated by a minus sign. Round your intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)

Question

−7% 8% −9% 6.7% 7.1%

Answer 1

To calculate the geometric mean return, we need to multiply all the returns together and then take the Nth root, where N is the number of returns.

(-0.07) * 0.08 * (-0.09) * 0.067 * 0.071 = -0.000058902

Now we need to take the 5th root of the product.

(-0.000058902)^(1/5) = -0.1171

The geometric mean return of the data set is -0.1171, or -11.71%.