I have 3-year returns at a monthly frequency, snippet below. How to compound the 3-year returns to obtain 10-year returns (since the cumulative product of 3 3-year return would be the 9-year return).
What is the best way to do it and why?
- Draw 4 3-year returns and just use first 10-year returns?
- Draw 3 3-year returns, and 1 1-year return
- Draw 3 3-year returns, and 1 "1-year" return but not over the full set of 1-year data points.
- Other ways?