The following information is available concerning the historical risk and return relationships in the U$.$S$.$ capital markets:

U$.$S$.$ CAPITAL MARKETS TOTAL ANNUAL RETURNS, $1990-2015$

a$.$ Explain why the geometric and arithmetic mean returns are not equal and whether one or the other may be more useful for investment decision making.

The arithmetic average assumes $[$

I, while the geometric average assumes $$

intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any.

Arithmetic mean: from