What is true about the geometric return? a. It is smaller than the arithmetic re

Question

What is true about the geometric return? a. It is smaller than the arithmetic return(except in the case when all the returns are identical, where the two are equal). b. It is larger than the arithmetic return(except in the case when all the returns are identical, where two are equal). c. Sometimes the geometric retum is larger and sometimes it is smaller than the arithmetic return. d. all of the above. 39. Large company stocks have an average return of about 11% and a standard deviation of about 20%. What is the range of returns large company stocks would have a. From -9% to +31% b. From-29% to+ 51% c. From-49 to + 71% d. Not enough information to do this. Using data from 1996-2000 above, what is the standard deviation of returns? a. 17. 00% b. 17. 50% c. 15. 91 d. 17. 79%

Explanation / Answer

Answer:39 a it is smaller than arithmetic, unless all returns are identical, in which case the two averages will be the same.

Because If returns are not constant and the time period of measurement is greater than one year, the geometric average will always be less than the arithmetic average.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.