Over the last four years,the common stock of Plymouth Shippers has had an arithmetic average return of 9.3 percent.Three of those four years produced returns of 14.1 percent,15.6 percent,and 3.4 percent,respectively.What is the geometric average return for this four-year period?

Question

Quizplus · Accepted Answer

Arithmetic average return = 0.093 = (0.141 + 0.156 + 0.034 + x)/4x = 0.041Geometric average return = [1.141 × 1.156 × 1.034 × 1.041)^1/4 - 1 = 9.16 percent

Over the Last Four Years,the Common Stock of Plymouth Shippers