What is the most appropriate metric to use

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Problem 1: An investor is trying to predict the returns of a stock one year from now. He has decided to base his analysis on historical returns; hence, he has found that the stock has generated a 5%, -3%, 6%, and 4% return in its four most recent years of operation. What is the most appropriate metric to use?

Group of answer choices

Option 1: It is best to use the geometric mean.

Option 2: It is best to use the compounded mean.

Option 3: It is best to use the arithmetic mean.

Reference no: EM132988422

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