Suppose You Own Two Stocks,A and B

question 74

Multiple Choice

Suppose you own two stocks,A and B.In year 1,stock A earns a 2% return and stock B earns a 9% return.In year 2,stock A earns an 18% return and stock B earns an 11% return.__________ has the higher arithmetic average return.

• A)Stock A
• B)Stock B
• C)The two stocks have the same arithmetic average return
• D)At least three periods are needed to calculate the arithmetic average return
• E)None of the above

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