Question

When data consist of percentages, ratios, growth rates, or other rates of change, the geometric mean is a useful measure of central tendency. For n data values the geometric mean, assuming all data values are positive, is as follows. To find the average growth factor over 5 years of an investment in a mutual fund with growth rates of 9.4% the first year, 11.3% the second year, 14.5% the third year, 3.8% the fourth year, and 5.7% the fifth year, take the geometric mean of 1.094, 1.113, 1.145, 1.038, and 1.057. Find the average growth factor of this investment. (Round your answer to four decimal places.)

Answer 1