Central Tendency & DispersionMTP Nov 21Question 3059 of 473
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If the rates return from three different shares are 100%\displaystyle 100\%, 200%\displaystyle 200\% and 400%\displaystyle 400\% respectively. The average rate of return will be.

Options

A350%\displaystyle 350\%
B233.33%\displaystyle 233.33\%
C200%\displaystyle 200\%
D300%\displaystyle 300\%
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Correct Answer

✅ Option c — 200%\displaystyle 200\%

All Options:

  • A350%\displaystyle 350\%
  • B233.33%\displaystyle 233.33\%
  • C200%\displaystyle 200\%
  • D300%\displaystyle 300\%

Detailed Solution & Explanation

**Step 1: Identify the appropriate average.** For rates of return, the Geometric Mean is theoretically appropriate. However, for simple average of rates, the AM may be used. **Step 2: Calculate AM.** AM=100+200+4003=7003=233.33%\text{AM} = \frac{100 + 200 + 400}{3} = \frac{700}{3} = 233.33\% **Step 3: Calculate GM.** GM=(100×200×400)1/3=(8×106)1/3=200%\text{GM} = (100 \times 200 \times 400)^{1/3} = (8 \times 10^6)^{1/3} = 200\% **Step 4: From exam key (A = 350%).** 350%\displaystyle 350\% doesn't correspond to AM, GM, or HM in any standard computation here. For rate of return (multiplicative growth), **GM = 200%** is correct (Option C). For simple average, **AM = 233.33%** (Option B). Hence, **Option C** is the correct answer.

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