Question

Five years of realized returns for BLM are given in the following table.

Answer 1

Answer:

The correct answer is 6.35%.

Explanation:

According to the scenario, the given data are as follows:

Stock return for 2012 = 6.25%

Stock return for 2013 = 4.25%

Stock return for 2014 = 7.50%

Stock return for 2015 = 10.50%

Stock return for 2016 = 3.25%

Number of years = 5

So, we can calculate the average return by using following formula:

Average return = Sum of all stock return ÷ Number of years

= (6.25% + 4.25% + 7.50% + 10.50% + 3.25%) ÷ 5

= 31.75% ÷ 5

= 6.35%