Question: Based on the following information, calculate the geometric average return, arithmetic average return, variance, and standard deviation for the stock. Year Return 1 10% 2

  1. Based on the following information, calculate the geometric average return, arithmetic average return, variance, and standard deviation for the stock.

Year

Return

1

10%

2

-5%

3

15%

4

20%

Draw and label a graph of a normal distribution using the mean and standard deviation. How many observations are typically required to approach a normal distribution? Compare and contrast the geometric and arithmetic average returns.

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