A stock had returns of 17 percent, 13 percent, 19 percent, 14 percent, 12 percen

Question

A stock had returns of 17 percent, 13 percent, 19 percent, 14 percent, 12 percent, and 5 percent over the last six years.

(Part A) What is the arithmetic return for the stock?

Answers:

13.33%

14.00%

13.53%

16.00%

13.43%

(Part B) What is the geometric return for the stock?

Answers:

13.35%

13.57%

16.10%

13.05%

13.25%

(Part A) What is the arithmetic return for the stock?

Answers:

13.33%

14.00%

13.53%

16.00%

13.43%

(Part B) What is the geometric return for the stock?

Answers:

13.35%

13.57%

16.10%

13.05%

13.25%

Explanation / Answer

Arithmtic Return = (17% + 13% + 19% + 14% + 12% + 5%)/ 6

Arithmtic Return = 13.33%

Geometric Return = (1.17 * 1.13 * 1.19 * 1.14 * 1.12 * 1.05)1/6 - 1

Geometric Return = 13.25%

19 percent, 14 percent, 12 percent, and 5 percent )

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