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Series Arithmetic Mean What was the arithmetic average annual return on large-co

ID: 2779434 • Letter: S

Question

  Series

Arithmetic Mean

What was the arithmetic average annual return on large-company stocks in nominal terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

What was the arithmetic average annual return on large-company stocks in real terms? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

Consider the following information on large-company stocks for a period of years.

Explanation / Answer

  Series Arithmetic Mean Real return   Large-company stocks 13.9 % 10.6   Small-company stocks 16.4 % 7.183333333   Long-term corporate bonds 6.2 % 6.2   Long-term government bonds 6.1 % 6.1   Intermediate-term government bonds 5.6 % 5.6   U.S. Treasury bills 3.8 % 3.8   Inflation 3.3 % 3.3 arithametic average annual return = 9.216666667 real return= 7.130555556

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