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a. The rates of return on Cherry Jalopies, Inc., stock over the last five years were 18 percent, 11 percent, 1 percent, 2 percent, and

a. The rates of return on Cherry Jalopies, Inc., stock over the last five years were 18 percent, 11 percent, 1 percent, 2 percent, and 11 percent. Over the same period, the returns on Straw Construction Companys stock were 16 percent, 19 percent, 5 percent, 2 percent, and 21 percent.

Calculate the variances and the standard deviations for Cherry and Straw.

b. A particular stock has a dividend yield of 1.6 percent. Last year, the stock price fell from $83 to $69. What was the return for the year?

c.

The rates of return on Cherry Jalopies, Inc., stock over the last five years were 23 percent, 11 percent, 5 percent, 7 percent, and 10 percent.

What is the geometric return for Cherry Jalopies, Inc.?

d. A stock has had returns of 26 percent, 12 percent, 5 percent, -12 percent, -7 percent, and 21 percent over the last six years. What are the arithmetic and geometric returns for the stock?

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