Over the past four years, a portfolio experienced returns of-8%,4%,17%, and -12%. The geometric mean return of the portfolio over the four-year period is closest to:
Add one to each of the given returns, then multiply them together and take the fourth root of the resulting product.0.92 × 1.04 × 1.17 × 0.88 = 0.985121; 0.985121 raised to the 0.25 power is 0.996259. Subtracting one and multiplying by 100 gives the correct geometric mean return: [(0.92 × 1.04 × 1.17 × 0.88)0.25- 1] × 100 = -0.37%.