- CFA Exams
- CFA Level I Exam
- Study Session 2. Quantitative Methods (1)
- Reading 7. Statistical Concepts and Market Returns
- Subject 4. Measures of Center Tendency

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**CFA Practice Question**

Which of the following is most likely correct?

A. If the geometric mean is negative, the arithmetic mean must also be negative.

B. The geometric mean return is a more appropriate measure of return than the arithmetic mean return.

C. If the arithmetic mean return is positive, it is implied that the return over the entire period is positive.

**Explanation:**Counter example for the two incorrect statements: return of -90%, +50%, +50% gives a total return of -77.5%

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