Problem:

Compute a net return for each month, and then average them to give the arithmetic average of monthly returns:

Beginning $4,110.41

Final $2575.26

# of Periods 60

Question:

1. What is the 5-year average (arithmetic) net monthly return on the S&P 500?

2. Now, compute the geometric average of those same returns (answer in net returns again, i.e., a 0% return is no change):

3. What was the net holding period return over the full 5 years?