The Geometric Mean Return on Large-Company Stocks for the 1926-2009

question 84

Multiple Choice

The geometric mean return on large-company stocks for the 1926-2009 period:

• A) is approximately equal to the arithmetic mean return plus one-half of the standard deviation.
• B) exceeds the arithmetic mean return.
• C) is approximately equal to the arithmetic mean return minus one-half of the standard deviation.
• D) is approximately equal to the arithmetic mean return plus one-half of the variance.
• E) is less than the arithmetic mean return.

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Definitions:

Average Daily Float

The average amount of uncollected funds in a bank account over a specified period.

Cheques

A document that orders a bank to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.

Collection Delay

The period between when a company invoices its customers and when it actually receives payment, affecting the company's cash flow.

Amounts

Quantities or sums of money.