Question

You own a stock that had returns of 12.05 percent, −16.76 percent, 21.64 percent, 25.41 percent, and 9.29 percent over the past five years. What was the arithmetic average return for this stock?

Answer 1

Answer:Arithmetic average return =10.326%

Step-by-step explanation:

Year Returns

1 12.05%

2 - 16.76%

3 21.64%

4 25.41%

5 9.29%

Total returns = 51.63%

Arithmetic average is The sum of all of the numbers in a considered list divided by the number of items of the list.

Therefore,

Arithmetic average return = Sum of year 1 to year 5 returns / number of items(year)

= 51.63% / 5

= 10.326%