Question: Ex: What is the arithmetic and geometric average for the following returns? Year 1 5% Year 2 -3% Year 3 12% Arithmetic average = (5

Ex: What is the arithmetic and geometric average for the following returns? Year 1 5% Year 2 -3% Year 3 12% Arithmetic average = (5 + (-3) + 12)/3 = 4.67% Geometric average = [(1+.05)*(1-.03)*(1+.12)]1/3 - 1 = .0449 = 4.49% Standard Deviation calculation: ([(4.67-5.0)^2 + (4.67- - 3.0)^2 + (4.67-12.0)^2] /(3-1)) ^.5= 56.3334^.5 = 7.5056 (why we should square root 2 and square root 0.5 is it a formula?

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What is the arithmetic and geometric average and standard deviation for the following returns? Year 1 10% Year 2 20% Year 3 10% Year 4 - 5% Year 5 -10%

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