Geometric average annual return


Problem:

Suppose that a stock gave a realized return of 20% per year over a two-year time period and a 10% return over the third year. The geometric average annual return is

A) 9.70%

B) 11.20%

C) 14.96%

D) 16.55%

Note: Please show how to work it out.

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Accounting Basics: Geometric average annual return
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