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Consider the rate of return of stocks ABC and XYZ. Year 1 2 4 5 ABC rXYZ rABC 22% 8 10 a. Calculate the arithmetic
Consider the rate of return of stocks ABC and XYZ. Year 1 2 4 5 ABC rXYZ rABC 22% 8 10 a. Calculate the arithmetic average return on these stocks over the sample period. (Round you answers to 2 decimal places. Omit the "%" sign in your response.) 3 1 O ABC O XYZ XYZ 28% 11 19 1 -15 rABC rxyz Arithmetic average b. Which stock has greater dispersion around the mean return? c. Calculate the geometric average returns of each stock. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "%" sign in your response.) Geometric average % d-1. If you were equally likely to earn a return of 22%, 8%, 10%, 3%, or 1%, 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 answer to 1 decimal place. Omit the "%" sign in your response.) Expected rate of return d-2. If you were equally likely to earn a return of 28%, 11%, 19%, 1%, or -15%, in each year (these are the five annual returns for stock XYZ), what would be your expected rate of return? (Do not round intermediate calculations. Round your answer to 1 decimal place. Omit the "%" sign in your response.) Expected rate of return % %
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