Question

What is the arithmetic average return for a stock that had annual returns of 8%, 2%, and 11% for the past 3 years?

a) 6.5%
b) 7%
c) 8.5%
d) 9%

Answer 1

The arithmetic average return for the stock with annual returns of 8%, 2%, and 11% over the past 3 years is 7%.

Step-by-step explanation:

To calculate the arithmetic average return for the stock that had annual returns of 8%, 2%, and 11% over the past 3 years, we simply add up the annual returns and then divide by the number of years.

The arithmetic average return = (8% + 2% + 11%) / 3 = 21% / 3 = 7%