Question

A stock has had the following year-end prices and dividends:

Year Price Dividend

0 $ 43.29 -

1 48.27 $ .48

2 57.19 .51

3 45.27 .60

4 52.19 .65

5 61.27 .73

What are the arithmetic and geometric average returns for the stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Arithmetic average return ? %

Geometric average return ?%

Answer 1

Year	Stock Price	Dividend	Aritmetic Average Return	Geometric Average Return
0	$     43.29	$         -
1	$     48.27	$    0.48	12.61%	1.13
2	$     57.19	$    0.51	19.54%	1.20
3	$     45.27	$    0.60	-19.79%	0.80
4	$     52.19	$    0.65	16.72%	1.17
5	$     61.27	$    0.73	18.80%	1.19
			9.57%	8.41%

Arithmetic Average Return = 9.57%

Geometric Average Return = 8.41%