A stock has had returns of 8 percent, 26 percent, 18 percent, −14 percent, 26 percent, and −6 percent over the last six years.
What are the arithmetic and geometric returns for the stock?
Arithmetic: 58% (sum of the percents)
Geometric: 38.6% (1.08*1.26*.86*1.26*.94-1)
you r wrong the Arithmetic sum of the percents then divided by the years so the answer is 9.67
the geometric 1.08*1.26*1.18*0.86*1.26*0.94^1/6-1 = ???
I don't know how to calculate the power ! do you know ?
It is arithmetic returns, not mean. I believe it is total returns.
No, you are right. to calculate the power submit it into google with parentheses around the power and the thing being powered
I am sure about the steps could you calculate the the geometric as i indicated because Idon't know how to do the power
8.55%. sorry about the errors earlier.
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