Average return for investment-realized return for investment

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Explain the difference between the average return for an investment and the realized return for an investment. Are both numbers? useful? If? so, explain why.

A. The realized return is what you would actually make if you hold the? investment, so this is the number you care about. The average return is useless.

B. Both numbers are useful. The realized return tells you what you would actually make if you held the investment over this period? (month or? year). You can use the average return over the period as the estimate of the monthly or annual expected return. If you use this? estimate, it is what you expect to make on the investment in the next period.

C. One number is the geometric? average; the other is the arithmetic average. Only the arithmetic average is useful.

Reference no: EM133305882

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