A Stock Has a Geometric Average Return of 14

question 93

Multiple Choice

A stock has a geometric average return of 14.6 percent and an arithmetic average return of 15.5 percent based on the last 33 years.What is the estimated average rate of return for the next 6 years based on Blume's formula?

• A)14.79 percent
• B)14.96 percent
• C)15.28 percent
• D)15.36 percent
• E)15.42 percent

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Definitions:

Chapter 13

A type of bankruptcy in the United States that allows individuals with regular income to develop a plan to repay all or part of their debts under court supervision.

Debtor's Total Obligations

This encompasses all debts and financial commitments that a debtor is responsible for repaying, including loans, bills, and other liabilities.

Chapter 13

Chapter 13 refers to a bankruptcy chapter under the U.S. Bankruptcy Code that allows individuals with a regular income to develop a plan to repay all or part of their debts under court supervision.

Debtor Retains Possession

A situation in which an individual or entity that owes money is allowed to keep possession of the collateral or property tied to the debt.