An asset had annual returns of 19, -38, -17, 25, and 5 percent, respectively, over the past five years. What is the arithmetic average return?
A) -1.2 percent
B) 0.8 percent
C) 1.2 percent
D) 1.6 percent
E) 2.3 percent

Question

Quizplus · Accepted Answer

The arithmetic average return is the sum of the returns divided by the number of returns. In this case, the sum of the returns is 19 - 38 - 17 + 25 + 5 = -6 percent. The number of returns is 5. Therefore, the arithmetic average return is -6 percent / 5 = -1.2 percent.

An Asset Had Annual Returns of 19, -38, -17, 25