A Stock Produced Annual Returns of 8

question 105

Multiple Choice

A stock produced annual returns of 8.5, −18, 15, 17, and 12 percent over the past five years, respectively. What is the geometric average return?

• A)5.78%
• B)6.04%
• C)6.34%
• D)7.21%
• E)8.20%

---

Definitions:

Aggregate Income

The total income earned by all individuals and entities within an economy.

Aggregate Consumption

The total amount of goods and services consumed in an economy within a given period.

Consumption Function

A mathematical expression describing the association between gross national income and the total amount spent on consumption.

Least Squares Estimates

Least squares estimates are those that correspond to the smallest sum of squared distances, or errors.