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Problem 3 (9 pts) Consider the rate of return on Stock A and Stock B below: Year 2019 2020 2021 TA 10% - 15%
Problem 3 (9 pts) Consider the rate of return on Stock A and Stock B below: Year 2019 2020 2021 TA 10% - 15% 8% 8% -5% 6% a. Calculate the arithmetic average returns for stock A and stock B over the 3 years sample period. (2pts) b. Calculate the geometric average returns for stock A and stock B over the 3 years sample period. (2pts) c. What is the expected rate of return for stock A and stock B. (1pt) d. What will be the value of $100 by the end of 2021 if invested in stock A at the beginning of 2019? (2pts) e. What will be the value of $100 by the end of 2021 if invested in stock B at the beginning of 2019? (2pts)
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College Accounting Chapters 1-30
Authors: John Price, M. David Haddock, Michael Farina
15th edition
1259994975, 125999497X, 1259631117, 978-1259631115
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