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

---

Definitions:

Charles Darwin

A 19th-century naturalist known for developing the theory of evolution by natural selection.

Galapagos Islands

An archipelago in the Pacific Ocean, renowned for its unique endemic species and significant role in Charles Darwin's theory of evolution.

Continental South America

The main continental landmass of South America, encompassing a wide range of geographical features, climates, and ecosystems.

Arid Islands

Islands with a severely dry climate, receiving minimal annual rainfall, which affects their ecosystems and water resources.