Average Return (arithmetic)

returns

The average of arithmetic returns, where the return $$ r(t)$$ in one period $$t $$ is given by $$\frac{V(f)V(i)}{V(i)}$$, where $$V(i)$$ is the initial value of the asset and $$V(f) $$ is the final value of the asset. The average return is then given by $$\sum_t \frac{r(t)}{n}$$, where t runs from 1 to n, the number of periods over which returns are computed.
