Question

The ​ S&P 500 index delivered a return of 10​%, 15​%, 15​%, and −25​% over four successive years. What is the arithmetic average annual return per​ year?

Answer 1

Answer:arithmetic average annual return per​ year= 3.75%

Explanation:

Year 1 = 10%

Year 2= 15%

Year 3 = 15%

Year 4 = -25%

total return = 15%

Arithmetic average annual return per year =(Return of year1 + return of year 2 + return of year 3+ return of year 4 )/4 =  15% /4 = 3.75%