Activity Frame $g$ information is available concerning the historical risk and return relationships in the U$.$S$.$ capital markets:

U$.$S$.$ CAPITAL MARKETS TOTAL ANNUAL RETURNS, $1990-2015$

a$.$ Explain why the geometric and arithmetic mean returns are not equal and whether one or the other may be more useful for investment decision making.

The arithmetic average assumes

$,$ while the geometric average assumes

b$.$ For the time period indicated, rank these investments on a relative basis using the coefficient of variation from most to least desirable. Do not round

intermediate calculations. Round your answers to two decimal places.

c$.$ Assume the arithmetic mean returns in these series are normally distributed. Calculate the range of returns that an investor would have expected to achieve

$95$ percent of the time from holding common stocks. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to

enter negative values, if any.