You Own a Stock That Has Produced an Arithmetic Average

question 87

Multiple Choice

You own a stock that has produced an arithmetic average return of 7.8 percent over the past five years.The annual returns for the first four years were 16,11,-19,and 3 percent,respectively. What was the rate of return on the stock in year five?

• A)-5.00 percent
• B)2.75 percent
• C)6.25 percent
• D)28.00 percent
• E)32.00 percent