Arithmetic average return
How do you calculate the annual arithmetic return for a stock with the use of 72 months of returns? And should you use the arithmetic or geometric average when calculating the sharpe ratio?
http://lmgtfy.com/?q=how+do+you+find+the+arithmetic+average+annual+retu… http://lmgtfy.com/?q=is+an+arithmetic+or+a+geometric+average+used+in+th…
Check for normality of the returns before calculating the Sharpe ratio.
Geometric when calculating returns.
When it comes to returns in finance, its almost always geometric.
Oh is that so? What do you do with negative returns?
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