Question

Jason invested $1,000 in large U.S. stocks at the beginning of 2012. This investment earned 15.60 percent in 2012, 30.25 percent in 2013, 11.65 percent in 2014, and 2.30 percent in 2015. What return did he earn in the average year during the 2012–2015 period? (Round answer to 2 decimal places, e.g. 1.52.) Excel Template (Note: This template includes the problem statement as it appears in your textbook. The problem assigned to you here may have different values. When using this template, copy the problem statement from this screen for easy reference to the values you’ve been given here, and be sure to update any values that may have been pre-entered in the template based on the textbook version of the problem.) Return earned in the average year %

Answer 1

Calculating the Return earned in the average year:-

Year	Stock Return (%)
2012	15.60
2013	30.25
2014	11.65
2015	2.30
Total Return (TR)	59.80
No of Years (n)	4 years
Return earned in the average year [(TR)/n]	14.95%

- Return earned in the average year = Total Return/No of years

= 59.80%/4

Return earned in the average year = 14.95%