n NISM Certifications
X NISM Series X
Medium

The cumulative wealth relative for 4 years is 1.2156. The geometric mean return?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    4.45%

  2. B

    6.12%

  3. C

    7%

  4. 5%

    Correct answer

Why this is the answer

(1.2156)^(1/4) – 1 ≈ 0.05 or 5%.

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