The return pattern on your favorite stock has been 9 percent,8 percent,-2 percent,15 percent,and 21 percent over the last five years.What is the stock's arithmetic average return and holding period return?
A)10.20%;8.24%
B)10.20%;60.53%
C)8.24%;10.20%
D)8.24%;60.53%
E)8.25;48.62%

Question

Quizplus · Accepted Answer

Average return = (.09 + .08 - .02 + .15 + .21)/5 = .1020,or 10.20%HPR = (1.09 × 1.08 × .98 × 1.15 ×1.21)- 1 = .6053,or 60.53%

The Return Pattern on Your Favorite Stock Has Been 9