You absolutely can use the arithmetic mean for percents and the result that B rises 10% in an average year is correct. The counterintuitive part is that the typ

You absolutely can use the arithmetic mean for percents and the result that B rises 10% in an average year is correct. The counterintuitive part is that the typical 10-year period is not the same as a sequence of 10 average years. Instead, some years will have higher growth than average and others lower. In the example, the split is exactly 50-50, so the typical annualized growth rate is given by the geometric mean. The reason typical growth is relevant is because the question asks about the probability that B is higher, not how much higher it would be on average.