Question
Arithmetic vs. Geometric Mean What is the arithmetic and geometric average for the following returns? Year 1 4.90% Year 2 1.95% Year 3 20.24% Year
Arithmetic vs. Geometric Mean
What is the arithmetic and geometric average for the following returns?
Year 1 4.90%
Year 2 1.95%
Year 3 20.24%
Year 4 -0.64%
Arithmetic average = 1+2++ Geometric average: [(1 + 1) (1 + 2 ) (1 + )] 1 1
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Foundations Of Financial Management
Authors: Stanley B. Block, Geoffrey A. Hirt, Bartley R. Danielsen
13th Edition
0073382388, 978-0073382388
