What Are the Arithmetic and Geometric Average Returns for a Stock

question 4

Multiple Choice

What are the arithmetic and geometric average returns for a stock with annual returns of 21%,8%,-32%,41%,and 5%?

• A) 5.6%; 8.6%
• B) 5.6%; 6.3%
• C) 8.6%; 5.6%
• D) 8.6%; 8.6%
• E) 8.6%; 6.3%

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Definitions:

Desert

A barren area of landscape where little precipitation occurs, thus supporting only sparse vegetation or none at all.

Plate Tectonics

The scientific theory explaining the movement of the Earth's lithospheric plates and how these movements cause earthquakes, volcanoes, mountain ranges, and oceanic trenches.

Seafloor Spreading

The process by which oceanic crust is formed at mid-ocean ridges and moves outward from ridge crests, driven by tectonic plate movements.

Volcanic Activity

The process by which magma and gases are transferred from the Earth's mantle to its surface, including eruptions, lava flows, and gas emissions.