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How much does the arithmetic and geometric average rates of return differ, assuming that the rate of return is a constant 6 % annually? The
How much does the arithmetic and geometric average rates of return differ, assuming that the rate of return is a constant annually?
The arithmetic return is while the geometric return is
The arithmetic return is while the geometric return is
The constant rate has a standard deviation of therefore the arithmetic and the geometric returns will be the same.
The arithmetic and the geometric returns will be the same since the standard deviation of the returns equals
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