Annualized returns refer to the geometric average amount of money earned by an investment each year over a given time period, expressed as a percentage. This measure allows investors to compare the profitability of different investments on a standardized basis by projecting the cumulative returns over multiple years into an annual format, which is crucial for evaluating performance in financial models such as the Carhart four-factor model.
congrats on reading the definition of annualized returns. now let's actually learn it.