StatisticsdrillGeometric mean of growth rates
A statistics problem from Statisticsdrill. Solve it with one answer box, with a fresh sample on every attempt and the worked steps and spreadsheet function in the answer, and it is checked the moment you submit.
The task
A fund's returns in 3 consecutive years were -13%, 29%, 17%. What was its average annual return over the period, as a geometric mean? A loss is negative. Give the percent rounded to 2 decimal places.
What this problem teaches
The arithmetic mean of the returns is 11.00%. It overstates the growth actually achieved whenever the returns vary.
A hint if you get stuck
Turn each return into a growth factor (1 + r), multiply them, take the nth root and subtract 1.
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