If an investor holds a stock for three years, the value at the end of three years will always be the initial cost of the stock times (1 + arithmetic average return) to the third power.

Question

Quizplus · Accepted Answer

This statement is not true. The value of a stock after three years can vary depending on market conditions and other factors, and cannot be determined solely by the initial cost of the stock and arithmetic average return.

If an Investor Holds a Stock for Three Years, the Value