You Own a Stock That Has Produced an Arithmetic Average

question 95

Multiple Choice

You own a stock that has produced an arithmetic average return of 5.6 percent over the past five years. The annual returns for the first four years were 15, 10, −18, and 8 percent, respectively. What was the rate of return on the stock in year five?

• A)−5.00%
• B)2.75%
• C)6.25%
• D)13.00%
• E)32.00%

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Definitions:

Financial Statements

Financial Statements are formal records of the financial activities and position of a business, person, or entity, including the balance sheet, income statement, and cash flow statement.

Attached Schedule

A supplementary document provided with financial statements or tax returns that provides additional details or calculations related to the main document.

Intangible Assets

Non-physical assets that have value, such as patents, copyrights, trademarks, and goodwill.