Question

Sharif's portfolio generated returns of 12 percent, 15 percent, −15 percent, 19 percent, and −12 percent over five years. What was his average return over this period?

3.8 percent

2.1 percent

17 percent

19 percent

Answer 1

The answer is 3.82

Explanation:

(12 + 15− 15− 12 + 19)/5 = 3.8 3.

Answer 2

3.8 percent

Explanation:

To find his average return over n years, we sum all of his returns, and divide by n.

In this problem:

5 years.

The sum is (12 + 15 - 15 + 19 - 12) = 19

19/5 = 3.8

So the correct answer is:

3.8 percent