Question
A stock has the following year end prices and dividends. What are the arithmetic and geometric average annual returns for the stock over this time
A stock has the following year end prices and dividends. What are the arithmetic and geometric average annual returns for the stock over this time period? What is the standard deviation of returns (use the arithmetic average)?
Year Price Dividend
1 $73.15 -
2 78.13 $2.45
3 82.05 2.49
4 76.13 2.55
5 77.05 2.62
Select one:
a. The arithmetic average is 4.56%, the geometric average is 4.72%, and the standard deviation is 39.87%
b. The arithmetic average is 5.72%, the geometric average is 5.56%, and the standard deviation is 39.87%
c. The arithmetic average is 4.72%, the geometric average is 4.56%, and the standard deviation is 6.32%
d. The arithmetic average is 4.56%, the geometric average is 4.72%, and the standard deviation is 6.32%
e. The arithmetic average is 4.72%, the geometric average is 4.56%, and the standard deviation is 39.87%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started