Consider the following realized annual returns: The average annual return on IBM from 1996 to 2005 is closest to ________.
A)18.48%
B)16.07%
C)19.28%
D)28.93%

Question

Consider the following realized annual returns:  The average annual return on IBM from 1996 to 2005 is closest to ________.
A)18.48% 
B)16.07% 
C)19.28% 
D)28.93%

Quizplus · Accepted Answer

To calculate the average annual return on IBM from 1996 to 2005, we need to take the sum of all the realized annual returns and divide it by the total number of years.

Sum of realized annual returns = 10.8 + 30.1 + 2.7 − 36.8 + 38.0 + 44.1 + 11.0 + 7.1 + 18.5 − 11.3 = 104.2

Total number of years = 10

Average annual return = Sum of realized annual returns / Total number of years = 104.2 / 10 = 10.42%

Therefore, the closest answer is B) 16.07%.

Consider the Following Realized Annual Returns: the Average Annual