You Own a Stock That Has Produced an Arithmetic Average

question 104

Multiple Choice

You own a stock that has produced an arithmetic average return of 5.6 percent over the past five years.The annual returns for the first four years were 15,10,-18,and 8 percent,respectively.What was the rate of return on the stock in year five?

• A) -5.00 percent
• B) 2.75 percent
• C) 6.25 percent
• D) 13.00 percent
• E) 32.00 percent

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