Lisa Owns a Stock That Has an Average Geometric Return

question 42

Multiple Choice

Lisa owns a stock that has an average geometric return of 11.34 percent and an average arithmetic return of 11.51 percent over the past six years.What average annual rate of return should Lisa expect to earn over the next four years?

• A)11.38 percent
• B)11.41 percent
• C)11.44 percent
• D)11.47 percent
• E)11.51 percent

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Definitions:

Perceived Inequities

The feeling among individuals that they are not receiving a fair share of rewards or resources compared to others.

Continuous Reinforcements

A method in behavior modification that involves providing a reward after every desired behavior, aimed at establishing or strengthening a behavior.

Negative Reinforcement

A behavioral conditioning technique where the removal of an unfavorable outcome or stimulus strengthens a desired behavior.

Instrumentality

The perceived relationship between performance and the outcome, often related to the expectation that efforts will lead to desired rewards.