Consider the rate of return of stocks ABC and $xYZ.$

Required:

a$.$ Calculate the arithmetic average return on these stocks over the sample period.

b$.$ Which stock has greater dispersion around the mean return?

c$.$ Calculate the geometric average returns of each stock. What do you conclude?

d$.$ If you were equally likely to earn a return of $20\%,12\%,19\%,4\%,$ or $2\%$ in each year $($these are the five annual returns for stock ABC $),$

what would be your expected rate of return?

e$.$ What if the five possible outcomes were those of stock XYZ$?$

f$.$ Given your answers to parts $($d$)$ and $($e$),$ which measure of average return, arithmetic or geometric, appears more useful for

predicting future performance?