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Consider the following monthly returns. Month 12 11 10 9 8 7 Year 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021

Consider the following monthly returns. Month 12 11 10 9 8 7 Year 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 2021 a. Calculate the average geometric return in % (Round to closest 2 decimal places). CO5321 6 4 Return in (%) 2.33 0.93 0.47 -1.16 0.70 0.93 1.16 -0.70 2.33 0.93 0.00 1.16 b. Calculate the average arithmetic return in % (Round to closest 2 decimal places). c. Briefly explain why these two may be different.

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a To calculate the average geometric return we can use the formula Average Geometric Return 1 R1 1 R2 1 Rn 1n 1 where R1 R2 Rn are the individual mont... blur-text-image

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