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Suppose you have 10 years of historical data, from which you calculate an arithmetic average return of 8.54% and a geometric average return of 8.21%.
Suppose you have 10 years of historical data, from which you calculate an arithmetic average return of 8.54% and a geometric average return of 8.21%. Using Blume's formula, what is your 2-year average forecast?
a. 8.503%
b. 8.246%
c. 7.765%
d. 8.511%
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