Suppose You Own Two Stocks, a and B

question 47

Multiple Choice

Suppose you own two stocks, A and B. In year 1, stock A earns a 2% return and stock B earns a 9% return. In year 2, stock A earns an 18% return and stock B earns an 11% return. Which stock has the higher geometric average return?

• A) Stock A
• B) Stock B
• C) The two stocks have the same geometric average return.
• D) At least three periods are needed to calculate the geometric average return.

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Definitions:

Convenience

The state of being able to proceed with something with little effort or difficulty, emphasizing ease and comfort.

Prenuptial Agreements

Legal contracts made between couples before getting married, outlining the division of assets and financial arrangements in case of a divorce or separation.

Financial Arrangements

Agreements or plans made to handle financial transactions, responsibilities, or investments.

Couple's

Pertaining to a pair of individuals who are in a romantic or committed relationship with each other.