Arithmetic and geometric average returns


Problem:

What are the arithmetic and geometric average returns for a stock with annual returns of 4%, 9%, -6%, and 18%? Explain in detail and also provide calculation.

A. 5.89%; 6.25%

B. 6.25%; 5.89%

C. 6.25%; 8.33%

D. 8.3%; 5.89%

E. 8.3%; 6.25%

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Finance Basics: Arithmetic and geometric average returns
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