Let the Returns n years ago be Rn
Given, R1 = 17.89%
R2 = -26.91%
R3 = X
R4 = 25.57%
Geometric return = ((1+R1)(1+R2)(1+R3)(1+R4))1/4 - 1
Given, Geometric Return = 4.22%
=> ((1+0.1789)(1-0.2691)(1+X)(1+0.2557))1/4 - 1 = 0.0422
=> ((1+0.1789)(1-0.2691)(1+X)(1+0.2557))1/4 = 1.0422
=> ((1+0.1789)(1-0.2691)(1+X)(1+0.2557)) = 1.04224
=> (1+X) = 1.04224/((1+0.1789)(1-0.2691)(1+0.2557)) = 1.0904
=> X = 0.0904 or 9.04%
Hence, Arithmetic Return = (R1 + R2 + R3 + R4)/4 = (0.1789 - 0.2691 + 0.0904 + 0.2557)/4 = 0.0640
plz help asap, with steps. A stock had returns of 17.89 percent (1 year ago), -26.91...
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