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1 . Following are the actual returns of the Dow Jones Industrial Average in the past 5 years Year DJIA return S&P 5 0 0

1. Following are the actual returns of the Dow Jones Industrial Average in the past 5 years
Year DJIA return S&P 500 return
201725.08%19.42%
2018-5.63%-6.24%
201922.34%28.88%
20207.25%16.26%
202118.73%26.89%
a. Just by looking at the numbers, what are your expectations for the 5-year arithmetic averages for the DJIA and the S&P 500?(i.e. is there a range of values that you
b. Calculate the 5-year arithmetic average AND the 5-year geometric average for the DJIA and the S&P 500.
c. Explain the numbers that you calculated in b for the DJIA in plain English. (i.e. if you calculated 10% for the Dows 5-year arithmetic average, what does it mean in plain English? If you calculate 11% for the Dows 5-year geometric average, what does it mean in plain English?)
d. Comparing your numbers of arithmetic averages and geometric averages, what are your take away in terms of the relationship between the 2 averages? (is one type of average always greater than the other, and more importantly, WHY?)

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