Question

The rate of returns from three different shares are 100%, 200% and 400% respectively, the average rate of return will be ___________ : (a) 350% (b) 200.33% (c) 200% (d) 300%

Answer 1

$\frac{100 + 200 + 300}{3} = \frac{600}{3} = 200\%$

Answer 2

Answer:

average rate of return will be 233.33%

Step-by-step explanation:

Average or mean can be defined as the ratio of sum of observations and total number of observations.

Mathematically, we can write

$\text{Average}=\frac{\text{sum of observations}}{\text{total number of observations}}$

Here, given that

sum of observations = 100%+ 200% + 400 % = 700%

total number of observations = 3

Substituting these values in the above formula, we get

$\text{Average }=\frac{700}{3}\\\\=233.33\%$

Therefore, the the average rate of return will be 233.33%