The Geometric Mean Return on Large-Company Stocks for the 1926-2012

question 45

Multiple Choice

The geometric mean return on large-company stocks for the 1926-2012 period:

• A)is approximately equal to the arithmetic mean return plus one-half of the standard deviation.
• B)exceeds the arithmetic mean return.
• C)is approximately equal to the arithmetic mean return minus one-half of the standard deviation.
• D)is approximately equal to the arithmetic mean return plus one-half of the variance.
• E)is less than the arithmetic mean return.

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Definitions:

Human Capital

The qualifications, know-how, and lived experiences of a person or society, assessed in terms of their profitability or cost to a business or country.

Compensating Differential

The additional amount of income that a worker requires to accept a job with undesirable features, compared to a similar job with more favorable features.

Cardiologist

A specialist doctor who diagnoses and treats conditions related to the heart and blood vessels.

Human Capital

Competencies, wisdom, and learning acquired by an individual or collective, evaluated for their financial or beneficial impact on an enterprise or sovereign state.