The S&P/ASX 200 index delivered a return of 15%, 20%, 20%, -25% over four successive years. What is the arithmetic average annual return per year?

Question

Quizplus · Accepted Answer

To calculate the arithmetic average return, we need to add up the annual returns and divide it by the number of years. 
(15% + 20% + 20% - 25%)/4 = 7.5%
Therefore, the arithmetic average annual return per year is 7.5%. So, the best choice is B.

The S&P/ASX 200 Index Delivered a Return of 15%, 20