Lululemon Athletica stock had a realized return of 7%,-2%,-3%,and -8% over four successive quarters.What is your annual realized return if you bought Lululemon at the beginning of the year and sold it at the end of the year?
A)-1.5%
B)21.4%
C)-6%
D)-6.4%
E)0%

Question

Quizplus · Accepted Answer

To calculate the annual realized return, we need to find the average of the quarterly returns.

Average quarterly return = (7% - 2% - 3% - 8%) / 4 = -1.5%

Now, to find the annual realized return, we need to compound this quarterly return over four quarters:

Annual realized return = (1 + (-1.5%))^4 - 1 = -6.4%

Therefore, the answer is D, -6.4%.

Lululemon Athletica Stock Had a Realized Return of 7%,-2%,-3%,and -8