Assume that the two-year holding rate of return is 40%. The average rate of return is therefore 20% per year. What is the annualized rate of return? Which is higher?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
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Hii expert please provide correct answer general Accounting

Assume that the two-year holding rate of
return is 40%. The average rate of return is
therefore 20% per year. What is the
annualized rate of return? Which is higher?
Transcribed Image Text:Assume that the two-year holding rate of return is 40%. The average rate of return is therefore 20% per year. What is the annualized rate of return? Which is higher?
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