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Consider the rate of return of stocks ABC and XYZ. Year 1 2 3 4 5 rABC 20% 10 12 6 2 rxyz 27% 12

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Consider the rate of return of stocks ABC and XYZ. Year 1 2 3 4 5 rABC 20% 10 12 6 2 rxyz 27% 12 17 0 -6 min NO d. If you were equally likely to earn a return of 20%, 10%, 12%, 6%, or 2%, in each year (these are the five annual returns for stock ABC), what would be your expected rate of return? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected rate of return % e. What if the five possible outcomes were those of stock XYZ? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected rate of return % f. Given your answers to (d) and (e), which measure of average return, arithmetic or geometric, appears more useful for predicting future performance? O Arithmetic O Geometric

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