题目
When analyzing investment returns, which of the following statements is correct?
选项
A.The geometric mean will exceed the arithmetic mean for a series with non-zero variance.
B.The geometric mean measures an investment’s compound rate of growth over multiple periods.
C.The arithmetic mean accurately estimates an investment’s terminal value over multiple periods.
答案
B
解析
B is correct. The geometric mean compounds the periodic returns of every period, giving the investor a more accurate measure of the terminal value of an investment.