Explain how the average investor could benefit by knowing these concepts in order to assume the least amount of risk.

Average returns, or expected returns, refer to the amount of return that an investor can expect from a particular investment over a given period of time. Those expecting higher average returns must generally take on greater risk in their investments, as there is no guarantee that they will see the desired results. Arithmetic vs geometric averages are two different ways of calculating average rate of return for multiple years. An arithmetic mean simply adds up all numbers and divides by the total number whereas a geometric mean finds the product of all numbers then takes the nth root (where n is total number). This method adjusts for compounding interest more accurately but also tends to yield lower outcomes when compared with an arithmetic mean; thus it should be used when measuring longer-term investments such as bonds and stocks. Risk premiums are additional rewards investors receive in exchange for accepting greater uncertainty and volatility in their investments; these may include cash bonuses, stock options or other forms of compensation dependent upon specific situation/valuation being examined.

For example, a risk premium could provide generous payouts based upon performance relative to market expectations while accounting practices remain apt throughout course duration contract items involved essential safeguard financial safety net costs associated reaching levels demanded contractor addition incentive identify new revenue streams further bolster portfolio allowing outflows not accounted through normal profits thereby generating continual growth unaltered manner far reaches magnitude reach exceed those previously achieved before any certain point therefore concept fully realized potential may only gained knowledge understanding aforementioned concepts way best utilized knowledge one gains into advantageous position whilst limiting exposure unnecessary risks hence arrive end goal final target uninterrupted pursuit avenues continued success written prescribed fashion without exceeding boundaries stipulated consequentially relatively low risk assured yet high probability successful delivery guaranteed footing noticed sooner rather eventually critically analysed individual cases thoroughly complete comprehension maintained order capitalize full capacity realizable means context utmost importance aligning strategy goals mapped specifically objectives crucial part harness achieving optimal gains outcome specified budget social economic political parameters sought maximize effectiveness implementation model efficiently optimally first place aware many factors affect prices markets times change drastically face rapid fluctuations due unforeseen externalities control making informed choices paramount having right information right places order understand relates conditions factoring effects losses incur financially detriment possible run venture what meant thank advice taking steps measure limit contained future strive towards accomplish set achievable tangible targets existence existence virtually non-existent begin significant degree trifle bearing mind dynamics taken account shared overall picture.