Arithmetic and Geometric Returns
A stock had returns of 16 percent, 13 percent, 16 percent, -7 percent, 19 percent, and 14 percent over the last six years.
Required:
(a) What is the arithmetic return for the stock?
a.11.83%
b.11.93%
c.14.20%
d.12.43%
e.12.03%
(b) What is the geometric return for the stock?
a.12.07%
b.13.92%
c.11.47%
d.11.57%
e.11.27%