Suppose that you bought a stock 6 years ago at

$12.The stock’s price at the end of each year is shown here.

Year 1 2 3 4 5 6 Price 10 14 15 22 30 25

a. Compute the rate of return for each year.

b. Compute the mean and median of the rates of return.

c. Compute the geometric mean of the rates of return.

d. Explain why the best statistic to use to describe what happened to the price of the stock over the 6-year period is the geometric mean.

The following exercises require the use of a computer and software.