When using the formula, GM^2 = AM return- (Sx^2)/2, the answer is coming only when we are using AM and Sx in decimal and not %. (because of square effect). Can someone pls clarify??
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Yes ,if we directly take % and square it there will be a lot of variation(due to percentage square) and s^2/2 may exceed AM giving rise to negative GM even with positive individual returns. And this technique is just an approximate one and not a perfect measure. These kind of observations hold true with random sampling from a large population, so sometimes in our examples we may get wrong answers