You had the following rates of return for on your portfolio for the last four years: 2016: -12.3% 2017: 18.4% 2018: 5.0% 2019: 12.5% Calculate the geometric average return on your portfolio. Enter your answer as a decimal, rounded to four decimal places.
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
You had the following
2016: -12.3%
2017: 18.4%
2018: 5.0%
2019: 12.5%
Calculate the geometric average return on your portfolio. Enter your answer as a decimal, rounded to four decimal places.
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