Your client has a three-year investment horizon. Based on that variable you decide to use the last three years of historical market data in determining your expected return assumption. Based on the holding period returns, what is the arithmetic annual rate of return assumption you will use when entering data into your portfolio optimization analyzer? (Base your response on the following market data.)

	Begin price	End price
3 yrs ago	$23.50	$28.00
2 yrs ago	$28.00	$26.25
Last year	$26.25	$33.75

		12.82%
		9.81%
		10.54%
		13.82%