Suppose That a Stock Gave a Realized Return of 20

question 59

Multiple Choice

Suppose that a stock gave a realized return of 20% over a two-year time period and a 10% return over the third year.The geometric average annual return is:

• A)9.70%
• B)11.20%
• C)14.96%
• D)16.55%

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Definitions:

Mode

The value that occurs most frequently in a data set.

Average

The most representative score in a set of scores.

Common Average

The arithmetic mean or simple average of a set of values, calculated by summing them up and dividing by the number of values.

Variance

A statistical measure that represents the dispersion or spread of a dataset relative to its mean, indicating how far the data points are from the mean.