Amazon.com stock prices gave a realized return of 20%,10%,10%,and 15% over four successive quarters.What is the annual realized return for Amazon.com for the year?

Question

Quizplus · Accepted Answer

To calculate the annual realized return, we use the geometric mean of the quarterly returns.

Annual realized return = [(1 + 0.20) x (1 + 0.10) x (1 + 0.10) x (1 + 0.15)]^(1/4) - 1 
= 1.6698 - 1 
= 0.6698

Therefore, the annual realized return for Amazon.com for the year is 66.98%. Option B is the correct answer.

AmazonCom Stock Prices Gave a Realized Return of 20%,10%,10%,and 15