The annual returns for three portfolios are shown in the following exhibit. Portfolios P and R were created in Year 1, Portfolio Q in Year 2.
Annual Portfolio Returns (%)
Year 1 Year 2 Year 3 Year 4 Year 5
Portfolio P −3.0 4.0 5.0 3.0 7.0
Portfolio Q −3.0 6.0 4.0 8.0
Portfolio R 1.0 −1.0 4.0 4.0 3.0
Q. The median annual return from portfolio creation to Year 5 for:
Portfolio P is 4.5%.
Portfolio Q is 4.0%.
Portfolio R is higher than its arithmetic mean annual return.
Solut
Median annual return for
P is 4
q is 5
so option a and b are incorrect
r is 3
arithmetic mean of r is 2.2
median of R is greater than mean of r so option c