Mock Questions

CFA Level I Quant
#1

An anlast collects the following set of ten returns from previous years:

Year 1 2.2%
Year 2 6.2 %
Year 3 8.9%
Year 4 9.3%
Year 5 10.5%
Year 6 11.7%
Year 7 12.3%
Year 8 14.1%
Year 9 15.3%
Year 10 18.4%

The geometric mean return is closest to:

A. 9.62%
B. 10.8%
C. 10.89%

I tried number of times, it doesnt give me the answer B. Therefore i need help on this.

#2

Adding 1 to all rates and multiplying across gives me 2.789236. The 10th root is 1.108022 and subtracting 1 gives an answer of 10.8%.

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#3

On the real exam, they’ll never give you ten returns and ask you to calculate the geometric mean return.

That’s absurd.

They’ll give you three, maybe four, tops.

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