An asset has annual returns of 14 percent, 8 percent, - 6 percent, 27 percent and 18 percent. What is the arithmetic return?
A) 11.64%
B) 12.20%
C) 13.05%
D) 14.16%
E) 15.25%

Question

Quizplus · Accepted Answer

The arithmetic return is calculated by summing the individual annual returns and then dividing by the number of years. So, (14% + 8% + (-6%) + 27% + 18%) / 5 = 61% / 5 = 12.20%.

An Asset Has Annual Returns of 14 Percent, 8 Percent