If returns on security A are more volatile than the returns on security B, the geometric average return of security A is _ the geometric average return of security B when their arithmetic average return is the same.

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Quizplus · Accepted Answer

If the returns on security A are more volatile than the returns on security B, then A will have a higher standard deviation than B. This means that A will have a lower geometric average return compared to B, even if their arithmetic average returns are the same. Therefore, the geometric average return of security A is lower than the geometric average return of security B when their arithmetic average return is the same.

If Returns on Security a Are More Volatile Than the Returns