What are the arithmetic and geometric average returns for a

What are the arithmetic and geometric average returns for a stock with annual returns of 4 percent, 9 percent,

Solution

Hi,

Please find the detailed answer as follows

Arithmetic Return = (4+9-5+17)/4 = 6.25%

Geomatric Return = [(1+4%)*(1+9%)*(1-5%)*(1+17%)]^1/4 - 1 = 5.95%

Thanks.