To calculate the geometric mean return, we need to multiply all the individual returns together and then take the nth root, where n is the number of returns.
Return 1: -5% = -0.05
Return 2: 6% = 0.06
Return 3: -7% = -0.07
Return 4: 4.7% = 0.047
Return 5: 5.1% = 0.051
Multiply all the returns together: (-0.05)(0.06)(-0.07)(0.047)(0.051) ≈ -0.000029358
Now, we need to take the 5th root of this product:
(-0.000029358)^(1/5) ≈ -0.0390
The geometric mean return for this data set is approximately -3.90%.
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.)
−5% 6% −7% 4.7% 5.1%
1 answer