General Electric (GE) is one of the world's largest companies; it develops, manufactures, and markets a wide range of products, including medical diagnostic imaging devices, jet engines, lighting products, and chemicals. In 2013, the stock price rose 33.54%, and in 2014, the stock price declined 9.8%. (Data extracted from finance.yahoo.com, May 5, 2015.)
a. Compute the geometric mean rate of return per year for the two-year period 2013-2014.
b. If you purchased $1,000 of GE stock at the start of 2013, what was its value at the end of 2014?
c. Compare the result of (b) to that of Problem 3.20 (b).