Spill Drink Company's stocks had -8%,11%,and 24% rates of return during the last three years respectively; calculate the (arithmetic)average rate of return for the stock.
A)8% per year
B)9% per year
C)10% per year
D)11% per year

Question

Quizplus · Accepted Answer

To calculate the average rate of return, we need to add the rates of return for the three years and divide by the number of years.

Average rate of return = ( -8% + 11% + 24% ) / 3 = 9% per year

Therefore, the best answer choice is B) 9% per year.

Spill Drink Company's Stocks Had -8%,11%,and 24% Rates of Return