You Have the Returns for a Stock Over the Last

question 68

Multiple Choice

You have the returns for a stock over the last twenty years. Assuming the returns are different each year, you know:

• A) the arithmetic return will always be larger.
• B) the geometric return will always be larger.
• C) the arithmetic return will be larger if there are no negative returns.
• D) the geometric return will be larger if there are no negative returns.
• E) it is uncertain whether the arithmetic or geometric return will be larger.

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Definitions:

Aggregate Demand

The aggregate need for products and services throughout an economy, specified at a consistent price level and during a certain time.

National Saving

The total saving in an economy, consisting of both private savings by households and businesses, and public savings by the government.

Formal Budget Process

The systematic procedures followed by organizations or governments to estimate revenues, plan expenditures, and manage finances.

Economic Report

A document that provides information about the economic performance, policies, and conditions of a country, region, company, or sector.