The following are annual rates of return for U.S. government T-bills and U.K. common stocks. Year U.S. Government T-Bills U.K. Common Stock 2012 0.063 0.150 2013 0.081 0.043 2014 0.076 0.374 2015 0.090 0.192 2016 0.085 0.106 a. Compute the arithmetic mean rate of return and standard deviation of rates of return for the two series. b. Discuss these two alternative investments in terms of their arithmetic average rates of return, their absolute risk, and their relative risk. c. Compute the geometric mean rate of return for each of these investments. Compare the arithmetic mean return and geometric mean return for each investment and discuss the difference between mean returns as related to the standard deviation of each series.

Get answer to your question and much more