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:

Mechanistic

Describes an organization structured with clear, rigid procedures and divisions, often likened to a machine in its operation.

Significant Economies

Large-scale benefits or savings achieved through the efficient production or operation scale, often resulting in competitive advantage.

Competitors Copy

The act of rival companies imitating products, services, strategies, or practices of each other, trying to gain a competitive advantage.

Technology

Utilizing scientific understanding for real-world applications, primarily in the industrial sector.