Question
Consider the rate of return of stocks ABC and XYZ. Year r ABC r XYZ 1 22% 36% 2 10 10 3 19 17 4
Consider the rate of return of stocks ABC and XYZ.
| Year | rABC | rXYZ |
|---|---|---|
| 1 | 22% | 36% |
| 2 | 10 | 10 |
| 3 | 19 | 17 |
| 4 | 3 | 0 |
| 5 | 1 | 8 |
Required:
a. Calculate the arithmetic average return on these stocks over the sample period. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
b. Calculate the geometric average returns of each stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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Financial Performance
Authors: Marc Bertoneche, Rory Knight
1st Edition
0750640111, 978-0750640114
