Consider the annual return data for the group of countries in Exhibit 5. Calculate the arithmetic and
Question:
Consider the annual return data for the group of countries in Exhibit 5.
Calculate the arithmetic and geometric mean returns over the three years for the following three stock indexes: Country D, Country E, and Country F.
Transcribed Image Text:
Exhibit 5: Annual Returns for Years 1 to 3 for Selected Countries' Stock Indexes Index Country A Country B Country C Country D Country E Country F Country G Country H Country I Country J Country K 52-Week Return (%) Year 2 Year 1 -15.6 7.8 5.3 -2.4 -4.0 5.4 12.7 3.5 6.2 8.1 11.5 -5.4 6.3 1.2 -3.1 -3.0 5.2 6.7 4.3 7.8 4.1 3.4 Year 3 6.1 -1.5 3.5 6.2 3.0 -1.0 -1.2 3.4 3.2 -0.9 1.2 Average 3-Year Return Arithmetic -4.97 4.20 3.33 0.23 -1.33 3.20 6.07 3.73 5.73 3.77 5.37 Geometric -5.38 4.12 3.32 0.15 -1.38 3.16 5.91 3.73 5.72 3.70 5.28
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