Over the Last Four Years, a Stock Has Had an Arithmetic

question 29

Multiple Choice

Over the last four years, a stock has had an arithmetic average return of 8.8 percent. Three of those four years produced returns of 16.3 percent, 10.2 percent, and -14.1 percent. What is the geometric average return for this 4-year period?

• A) 7.83 percent
• B) 8.39 percent
• C) 8.67 percent
• D) 9.40 percent
• E) 9.97 percent

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Definitions:

Capillaries

Microscopic blood vessels that connect arterioles and venules, facilitating the exchange of water, oxygen, carbon dioxide, and other substances between blood and tissues.

Capillaries

Tiny blood vessels that connect arterioles and venules, facilitating the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and tissues.

Osmotic Pressure

The pressure required to prevent the flow of a solvent into a solution via osmosis.

Heme

An iron-containing compound that forms an essential component of hemoglobin, allowing it to bind oxygen in the bloodstream.