The Common Stock of Petersen and White Importers Yielded Returns

question 11

Multiple Choice

The common stock of Petersen and White Importers yielded returns of 42%, -5%, -18%, 9%, and 12% over the past 5 years, respectively. The arithmetic average return for this period of time is _____%
While the geometric average return is _____%.

• A) 8; 6.19
• B) 8; 7.01
• C) 8; 7.80
• D) 10; 9.20
• E) 10; 9.84

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Definitions:

Fifth Power

Raising a number or expression to the exponent of five, multiplying it by itself four times.

Hooke's Law

A principle of physics that states the force needed to extend or compress a spring by some distance is proportional to that distance.

Spring Scale

A scale that measures weight or force by the stiffness of springs.

Hooke's Law

A principle stating that the force needed to extend or compress a spring by some distance scales linearly with respect to that distance.