Question

Geometric returns are always greater than arithmetic average returns. Select one: True False

Answer #1

**Answer : False**

**Geometric return can be equal to or less than Arithmetic
average.**

**This is because Arithmetic average is simple average of
returns.**

**for example, if say returns are = 10% and 20% for 2
years**

**Arithmetic average return = (10% +20%)/2 =
15%**

**Geometric return = ((1+r1)*(1+r2)......(1+rn)) 1/n -
1**

**Geometric return = ((1+0.10)*(1+0.20)) 1/2 - 1 =
14.89%**

**so Geomteric return is mostly less than Arithmetic
return and in ver less cases equal to Arithmetic
return.**

What are the arithmetic and geometric average returns for a
stock with annual returns of 6.2%, 12.8%, ?7.7%, and 9.4%? (3 pts)
Explain why the aggregate returns are different considering each of
the 4 year returns are identical?

A firm's average variable cost cannot be greater than its
average total cost.
Select one:
a. False
b. True

DOES AN ARITHMETIC SEQUENCE ALWAYS DIVERGE? TRUE/FALSE AND
EXPLAIN WHY

Personal income
Select one:
A. is always greater than national income. B. is always less
than national income. C. will always equal national income. D. may
be greater than or less than national income.

Calculate the arithmetic average, geometric average, variance,
and standard deviation of an investment with five year returns of
10%, 6%, 4%, 2% and -10

15.For any given output level, a firm's long-run costs Select
one:
a. are always greater than or equal to its short-run costs.
b. are usually greater than or equal to its short-run costs
except in the case of diminishing returns to scale.
c. are always less than or equal to its short-run costs.
d. are usually less than or equal to its short-run costs except
in the case of diminishing returns to scale.

The marginal propensity to consume is greater than zero but less
than one.
True
False

If the value of beta for the firm VIC is greater than one,
then
Select one:
The expected returns for VIC are lower than the market
returns
The expected returns for VIC are greater than the market
returns
The expected returns for VIC are equal to the market returns

Consider the following five monthly returns. The arithmetic
average monthly return over this period is 1.40% and the geometric
average monthly return over this period is 1.33%. Explain the
difference between the arithmetic average return and the geometric
average return. Are both numbers useful? If so, explain why?
3% -1% 2% 7% -4%
Choose the correct answer below.
Both numbers are useful. The geometric average return tells you
what you would actually make if you held the stock over this...

1-For a turbine, the isentropic work output is always greater
than the actual work output
A True
B False
2-For a compressor, the isentropic work input is always greater
than the actual work output
A True
B False
3-Ignoring kinetic and potential energy, and for a steady state
process with one inlet and one outlet, the internally reversible
work can be given as:
A ∫12pdv
B ∫12vdp

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