Question: Does the arithmetic or geometric mean better describe the average annual rate of return earned over the period? Why?(Select the best choice below.) A. Arithmetic
Does the arithmetic or geometric mean better describe the average annual rate of return earned over the period? Why?(Select the best choice below.) A. Arithmetic average return better describes the average annual rate of return over a period because it is a simple average, so it answers the question concerning the expected rate of return over a multi-year period. B. Geometric average return better describes the average annual rate of return over a period because it is a simple average, so it answers the question concerning the expected rate of return over a multi-year period. C. Arithmetic average return better describes the average annual rate of return over a period because it takes compounding into account, so it answers the question concerning the expected rate of return over a multi-year period. D. Geometric average return better describes the average annual rate of return over a period because it takes compounding into account, so it answers the question concerning the expected rate of return over a multi-year period
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