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A hedge fund publishes 10-year returns for its 75 active investment funds: average annual return = 12%. However, researchers discover 50 underperforming funds were closed during this period and excluded from published data. The closed funds averaged −4% annual returns. What is the true average return across all funds that the firm managed (including closed ones)?
A hedge fund publishes 10-year returns for its 75 active investment funds: average annual return = 12%. However, researchers discover 50 underperforming funds were closed during this period and excluded from published data. The closed funds averaged −4% annual returns. What is the true average return across all funds that the firm managed (including closed ones)?