A Stock Has Annual Returns of 6 Percent,14 Percent,-3 Percent,and

question 32

Multiple Choice

A stock has annual returns of 6 percent,14 percent,-3 percent,and 2 percent for the past four years.The arithmetic average of these returns is _____ percent while the geometric average return for the period is _____ percent.

• A)4.57; 4.75
• B)4.75; 4.57
• C)6.33; 6.19
• D)6.19; 6.33
• E)6.33; 6.33

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Definitions:

Darwin

Charles Darwin, a British naturalist who is best known for his contributions to the science of evolution and the theory of natural selection.

Empirical Approach

A method of inquiry that relies on direct observation, experimentation, and evidence-based understanding to gain knowledge and facts.

Observation

The act of closely monitoring or examining something or someone to gain information or understanding.

Experimentation

The methodical testing of theories or hypotheses by manipulating variables to observe their effects.