Determining the arithmetic average return


Problem:

You purchased 1,300 shares of LKL stock 5 years ago and have earned annual returns of 7.1 percent, 11.2 percent, 3.6 percent, -4.7 percent and 11.8 percent.

Required:

Question: What is your arithmetic average return?

  • 4.47 percent
  • 5.80 percent
  • 6.23 percent
  • 6.47 percent
  • 6.98 percent

Note: Explain all calculation and formulas.

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Accounting Basics: Determining the arithmetic average return
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