Answer: E. Never
geometric average return can NEVER exceed the arithmetic average return for a given set of returns
Explanation:
The arithmetic average return is always higher than the other average return measure called the geometric average return. The arithmetic return ignores the compounding effect and order of returns and it is misleading when the investment returns are volatile.
Arithmetic returns are the everyday calculation of the average. You take the series of returns (in this case, annual figures), add them up, and then divide the total by the number of returns in the series. Geometric returns (also called compound returns) involve slightly more complicated maths.
Answer:
Following is given the solution of your question as required.
All the necessary descriptions are given in form of comments,
Sample output are also shown.
I hope it will help you!
Explanation:
I have to type 20 characters here so...
