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(1/5) - 1<br/>9.53%. You should be very careful about this point since the Mason & Lind textbook is quite ambiguous on this point. Finally, note that the geometric mean may not be defined if some of the salary changes are negative.<br/><br/></p> Exam Questions

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9.53%. You should be very careful about this point since the Mason & Lind textbook is quite ambiguous on this point. Finally, note that the geometric mean may not be defined if some of the salary changes are negative.
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Explanation:
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NEW QUESTION: 3
An employee had the following percentage increases in salary over the last 5 years: 4%, 7%, 10%, 15%,
12%. The geometric mean of his salary increases equals ________.
A. 9.22%
B. 9.53%
C. 9.60%
D. 8.72%
Answer: D
Explanation:
Explanation/Reference:
Explanation:
The straight geometric mean of the increases is (0.04*0.07*0.1*0.15*0.12)

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(1/5) = 8.72%. Note that this is different from geometric rate of change, which in this case would be (1.04*1.07*1.1*1.15*1.12)
 

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