PROBLEM I (8 points) Following are the single period returns in each of the years 2013, 2014, 2015

Year Return

2013 12%

2014 -10%

2015 28%

a) What was the arithmetic average return over the three years?

b) What was the geometric average return over the three years?

c) If you invested $1000 per year at the beginning of each year 2013, 2014, 2015, how much would you have at the end of 2015, What was your Average Return?

Show all your work. (No Excel)