(Option A) The geometric average return is defined as the average compound return earned per year over a multiyear period.
The geometric average return is a mathematical measurement of the average compound return earned per year over a multiyear period. It is calculated by taking the nth root of the product of all the returns in the multiyear period, where n is the number of years in the period.
This is different from the arithmetic average return, which calculates the average return over a multiyear period by simply adding up all the returns and dividing by the number of years in the period. The geometric average return is a more accurate measurement of the average return earned over the entire period, as it takes into account the compounding effect of returns.
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