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The table below shows the closing value (end of year) and returns on the NASDAQ Composite Index from 1998 to 2003. You will note that
The table below shows the closing value (end of year) and returns on the NASDAQ Composite Index from 1998 to 2003. You will note that there was a fair amount of variation in the yearly returns over this period! Compute the arithmetic average and the compound average of the returns over the period from Dec 31, 1998 to Dec 31, 2003. Calculate the difference between the arithmetic average and the compound average. Year Index Return 1998 2,192.68 1999 4,069.31 85.59% 2000 2,470.52 -39.29% 2001 1,950.40 -21.05% 2002 1,335.51 -31.53% 2003 2,003.37 50.01% A. The arithmetic average return is %. (Round to two decimal places.) B. The compound average returns is negative %. (Round to two decimal places.) C. The difference is %. (Round to two decimal places.)
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