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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