A Stock Has an Average Arithmetic Return of 12

question 2

Multiple Choice

A stock has an average arithmetic return of 12.55 percent and an average geometric return of 12.40 percent based on the annual returns for the last 15 years. What is projected average annual return on this stock for the next 10 years?

• A) 12.17 percent
• B) 12.21 percent
• C) 12.38 percent
• D) 12.50 percent
• E) 12.69 percent

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