A Stock Has an Average Arithmetic Return of 10

question 21

Multiple Choice

A stock has an average arithmetic return of 10.55 percent and an average geometric return of 10.41 percent based on the annual returns for the last 15 years.What is projected average annual return on this stock for the next 10 years?

• A) 10.17 percent
• B) 10.21 percent
• C) 10.38 percent
• D) 10.46 percent
• E) 10.79 percent

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Definitions:

Upper Two Quintiles

The section of a population that falls into the top 40% in terms of income or wealth distribution, often used in socio-economic analyses.

Income

The money received by an individual or entity in return for their labor, from transfers, or from investments.

Middle Three Quintiles

The middle three quintiles refer to the middle segments of a population when it is divided into five equal parts based on income or wealth, often used to represent the middle class.

Income Received

The total earnings obtained by individuals or entities, typically through employment, investments, or other sources, during a specified period.