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Which of the following best describes the differences between the arithmetic mean and geometric mean growth rates? The procedures used to calculate the geometric mean
Which of the following best describes the differences between the arithmetic mean and geometric mean growth rates? The procedures used to calculate the geometric mean growth rate and arithmetic mean growth rate are somewhat different, but produce the same result. The geometric mean growth rate calculation takes into account changes in the basis, while the arithmetic mean growth rate does not. The arithmetic mean growth rate is preferable to the geometric mean growth rate when calculating rates of return based on changes in stock price. The geometric mean growth rate is preferable to the arithmetic mean growth rate when calculating rates of return based on changes in stock price. More than one of the answers is correct
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