The Geometric Return on a Stock Over the Past 10

question 72

Multiple Choice

The geometric return on a stock over the past 10 years was 7.9 percent.The arithmetic return over the same period was 8.8 percent.What is the best estimate of the average return on this stock over the next 5 years?

• A) 8.40 percent
• B) 9.05 percent
• C) 9.08 percent
• D) 9.13 percent
• E) 9.47 percent

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Definitions:

Ethnocentrism

The conviction that one's own ethnic group or culture is inherently superior, frequently paired with a disdain for other cultures.

Xenophobia

A fear or hatred of foreigners, people from different cultures, or strangers.

Stereotyping

The act of making oversimplified or generalized beliefs about a group of people or things.

Pluralism

A condition or system in which two or more states, groups, principles, sources of authority, etc., coexist.