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please help find the geometric average of return. (Solving a comprehensive problem) Use the end-of-year stock price data in the popup window, , to answer

please help find the geometric average of return.

(Solving a comprehensive problem) Use the end-of-year stock price data in the popup window,

, to answer the following questions for the Harris and Pinwheel companies.

  1. Compute the annual rates of return for each time period and for both firms.
  2. Calculate both the arithmetic and the geometric mean rates of retum for the entire three-year period using your annual rates of retum from part a. (Note: you may assume that neither firm pays any dividends.)
  3. Compute a three-year rate of return spanning the entire period (Le., using the ending price for period 1 and ending price for period 4).
  4. Since the rate of returm calculated in part c is a three-year rate of retum, convert it to an annual rate of return by using the following equation:

o. How is the annual rate of return calculated in part d related to the geometric rate of return? When you are evaluating the performance of an investment that has been held for several years, what type of average rate of return (arthmetic or geometric) should you use? Why?

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(Solving a comprehensive problem) Use the end-of-year stock price data in the popse window, , to answer the following quentions for the Hartis and Printeel companies. a. Compule the annual rales of return for each time penod and for both firns. c. Compute a three-yew rate of return sparning the entre period 6.e, using tow ending price for period 1 and ending price for period 4 ) 6. (Flound to tro decomas pieces) Enter the annual rate of return for each year for Pinwheel in the table below. (Round to two decimal places.) b. The arithmetic average rate of return earned by investing in Harris stock over this period is %. (Round to two decimal place The arithmetic average rate of return earned by investing in Pinwheel stock over this period is \%. (Round to two decimal places The geometric average rate of return earned by investing in Harris stock over this period is \%. (Round to two decimal places.)

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