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The S&P 500 showed the following TR's for a 6 year period: 11.1 percent, -5.2 percent, 20.3 percent, 26.7 percent, -12.4 percent, and 2.2 percent.
The S&P 500 showed the following TR's for a 6 year period: 11.1 percent, -5.2 percent, 20.3 percent, 26.7 percent, -12.4 percent, and 2.2 percent.
1. Calculate the arithmetic mean return for the 6 year period.
2. Calculate the geometric mean return for the 6 year period.
3. Which measure is best for forecasting next years return?
4. What is your best estimate of the value of a $1000 investment in five (5) years?
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