Question
An investor is analyzing a new stock investment with the following annual returns over 4 years: Year 1: 12%, Year 2: -8%, Year 3: 15%,
An investor is analyzing a new stock investment with the following annual returns over 4 years: Year 1: 12%, Year 2: -8%, Year 3: 15%, Year 4: 5%. Calculate the geometric mean return of the stock. Compare the geometric mean to the arithmetic mean and discuss their implications on the investment's risk.
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Intermediate Accounting
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
Volume 1, 6th Edition
1259103250, 978-1259103254, 978-0071339476
