Leeanne Owns a Stock That Has an Average Geometric Return

question 34

Multiple Choice

Leeanne owns a stock that has an average geometric return of 12.30 percent and an average arithmetic return of 12.55 percent over the past six years.What average annual rate of return should Leeanne expect to earn over the next four years?

• A) 12.38 percent
• B) 12.40 percent
• C) 12.44 percent
• D) 12.47 percent
• E) 12.51 percent

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Definitions:

Cognitive Goal Setting

The process of establishing clear, specific, and challenging cognitive objectives aimed at enhancing individual or group performance.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions and approaches.

Social Loafing

The tendency of individuals to exert less effort when working in a group compared to when they work alone.

Production Blocking

A process loss in brainstorming sessions where individuals have to wait their turn to contribute ideas, potentially forgetting or discarding them in the meantime.