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Calculate the annual arithmetic mean and geometric mean return on the following security, purchase price = $27; first-year dividend = $6; price after one year
Calculate the annual arithmetic mean and geometric mean return on the following security, purchase price = $27; first-year dividend = $6; price after one year = $32; second-year dividend = $6; selling price after two years = $25. (Round intermediate calculations to 3 decimal places, e.g. 15.251% and the final answers to 2 decimal places, e.g. 15.25%.) Arithmetic average return? %
Geometric mean return ? %
State which method is more appropriate for the situation.
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