Use of returns may be both arithmetic average or geometric ordinary but geometric common is a lot more appropriate then arithmetic ordinary as arithmetic common is reflecting easy return around a time period on Original financial commitment, irrespective of the money attain from interval to period. Having said that, geometric typical shows compound return, which makes balance of investment worth of preceding 12 months a theory foundation for calculation of next yr’s return i.
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Introductory paragraph: Begin by crafting a precise and succinct thesis assertion, which shouldn’t exceed a couple of sentences. Carry on to elucidate the challenge's importance, the rationale behind this case study, and its relevance in mitigating the issue.