Question: & explanation Generated by AI To analyze the differences between the arithmetic and geometric means for the portfolios based on the numbers we computed earlier,
& explanation Generated by AI To analyze the differences between the arithmetic and geometric means for the portfolios based on the numbers we computed earlier, we will follow your format. Here's a summary based on the calculations we performed: Small Stock (SMLSTK): Arithmetic Mean: 0.013639 0.013639 Geometric Mean: 0.01324 0.01324 Difference: 0.013639 0.01324 = 0.000399 0.0136390.01324=0.000399 Medium Stock (MEDSTK): Arithmetic Mean: 0.011449 0.011449 Geometric Mean: 0.01107 0.01107 Difference: 0.011449 0.01107 = 0.000379 0.0114490.01107=0.000379 Large Stock (LRGSTK): Arithmetic Mean: 0.008860 0.008860 Geometric Mean: 0.00871 0.00871 Difference: 0.008860 0.00871 = 0.00015 0.0088600.00871=0.00015 Corporate Bonds (CBOND): Arithmetic Mean: 0.004471 0.004471 Geometric Mean: 0.00406 0.00406 Difference: 0.004471 0.00406 = 0.000411 0.0044710.00406=0.000411 Government Bonds (GBOND): Arithmetic Mean: 0.004283 0.004283 Geometric Mean: 0.00385 0.00385 Difference: 0.004283 0.00385 = 0.000433 0.0042830.00385=0.000433 T-Bills (TBILL): Arithmetic Mean: 0.002657 0.002657 Geometric Mean: 0.00236 0.00236 Difference: 0.002657 0.00236 = 0.000297 0.0026570.00236=0.000297 Summary of Differences Largest Difference: Small Stock (0.000399) Smallest Difference: Large Stock (0.00015) Explanation for Observed Differences The trend observed here indicates that: Small Stocks exhibit the largest difference between the arithmetic and geometric means, att
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