Question: Using single-period arithmetic returns, and starting with $100, calculate: (a) a 30% gain followed by a 20% loss (average 5% per period gain) (b) a

Using single-period arithmetic returns, and starting with $100, calculate:

(a) a 30% gain followed by a 20% loss ("average" 5% per period gain)

(b) a 5% gain followed by a 5% gain ("average" 5% per period gain)

What is the difference (a minus b)?

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