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A stock has had returns of 18 percent, 13 percent, 8 percent, -15 percent, -2 percent,...

A stock has had returns of 18 percent, 13 percent, 8 percent, -15 percent, -2 percent, and 20 percent over the last six years. What are the arithmetic and geometric returns for the stock?

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Answer #1

Return 0.18 0.13 0.08 -0.15 -0.02 0.2 0.42 Return+1 1.18 1.13 1.08 0.85 0.98 1.2 1.439495971 Product of above Total number of

Arithmetic Mean = 7% and Geometric Mean = 6.26%

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