Lisa owns a stock that has an average geometric return of 11.34 percent and an average arithmetic return of 11.51 percent over the past six years.What average annual rate of return should Lisa expect to earn over the next four years?
A)11.38 percent
B)11.41 percent
C)11.44 percent
D)11.47 percent
E)11.51 percent

Question

Quizplus · Accepted Answer

Projected return = {[(4 - 1)/(6 - 1)] × .1134} + {[(6 - 4)/(6 - 1)] × .1151} = 11.41 percent

Lisa Owns a Stock That Has an Average Geometric Return