Returns and risk premiums
If you own a stock with volatile returns over a 2-year period, will the average return be higher or lower than the geometric return? Explain why. (75–150 words, or 1–2 paragraphs)Why is it more convenient to display your investment returns in percentage terms rather than dollar terms? (75–150 words, or 1–2 paragraphs)Would a common stock or a corporate bond demand a higher risk premium? Explain why. (75–150 words, or 1–2 paragraphs).