A Stock Earned a Real Average Arithmetic Rate of Return

Multiple Choice

A stock earned a real average arithmetic rate of return of 5.65 percent for a 4-year period.During that period inflation averaged 3.6 percent while U.S.Treasury bills returned 4.2 percent.Assume the stock had annual nominal returns of 8 percent,13 percent and 12 percent for three of the four years.What nominal rate of return did the stock earn in the fourth year?

A) 3.25%
B) 3.65%
C) 3.26%
D) 4.00%
E) 4.25%