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Suppose a particular investment had the following annual returns: 4%, 14%, -7%, 23%, 9%, 2%. Calculate the arithmetic and geometric averages. If you wanted to
Suppose a particular investment had the following annual returns: 4%, 14%, -7%, 23%, 9%, 2%. Calculate the arithmetic and geometric averages. If you wanted to forecast what the stock market will do over the next year, should you use an arithmetic or geometric average?
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