Year |
Price |
Dividend |
1 |
$85.18 |
--- |
2 |
$92.35 |
$0.55 |
3 |
$90.49 |
$0.75 |
4 |
$100.05 |
$0.90 |
Rate of Return of Year 2 =(End Price-Beginning
Price+Dividend)/Beginning Price =(92.35-85.18+0.55)/85.18=9.0632%or
9.06%
Rate of Return of Year 3 =(End Price-Beginning
Price+Dividend)/Beginning Price
=(90.49-92.35+0.75)/92.35=-1.2019%or-1.20%
Rate of Return of Year 4 =(End Price-Beginning
Price+Dividend)/Beginning Price
=(100.05-90.49+0.9)/90.49=11.5593%or 11.56%
Arithmetic return =(9.0632%-1.2019%+11.5593%)/3
=6.47%
Geometric Return =((1+9.0632%)*(1-1.2019%)*(1+11.5593%))^(1/3)-1
=6.33%
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