A stock had returns of 6%,13%,-11%,and 17% over the past four years. What is the geometric average return for this time period?
A) 4.5%
B) 5.7%
C) 6.2%
D) 7.3%
E) 8.2%

Question

Quizplus · Accepted Answer

Geometric mean can be calculated by multiplying all the returns and then taking the nth root of the product, where n is the number of returns. 
Thus, Geometric mean =(1.06×1.13×0.89×1.17)(¼)−1=1.057−1=0.057, or 5.7% rounded to one decimal point. 
Therefore, the correct answer is B) 5.7%.

A Stock Had Returns of 6%,13%,-11%,and 17% Over the Past