Leeanne Owns a Stock That Has an Average Geometric Return

question 38

Multiple Choice

Leeanne owns a stock that has an average geometric return of 12.30 percent and an average arithmetic return of 12.55 percent over the past six years. What average annual rate of return should Leeanne expect to earn over the next four years?

• A)12.38%
• B)12.40%
• C)12.44%
• D)12.47%
• E)12.51%

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Definitions:

Behaviorist

A psychologist who studies behavior, emphasizing the external behaviors of people and their reactions on the environment over internal processes.

Psychological Perspectives

Viewpoints or approaches within psychology that emphasize different aspects of human behavior and mental processes.

Functional

Pertaining to the purposeful and practical use or action of something, often implying that it is designed based on its utility.

Cognitive

Pertaining to mental processes such as perception, memory, judgment, and reasoning.