Kids Toys plc has had total returns over the past ﬁve years of 0%, 7%, -2%, 10%, and 12%.What was the arithmetic average return on this equity?
A)5.40%
B)5.50%
C)6.15%
D)6.33%
E)6.75%

Question

Quizplus · Accepted Answer

The arithmetic average return is the sum of the returns divided by the number of returns. In this case, the sum of the returns is 0% + 7% + (-2%) + 10% + 12% = 27%. The number of returns is 5. Therefore, the arithmetic average return is 27% / 5 = 5.4%.

Kids Toys Plc Has Had Total Returns Over the Past