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Question Help P7-8 (similar to) (Related to Checkpoint 7.2) (Calculating the geometric and arithmetic average rate of return) Marsh Inc. had the following end-of-year stock
Question Help P7-8 (similar to) (Related to Checkpoint 7.2) (Calculating the geometric and arithmetic average rate of return) Marsh Inc. had the following end-of-year stock prices over the last five years and paid no cash dividends: Time Marsh 1 $8 2 11 3 18 4 6 5 8 (Click on the icon in order to copy its contents into a spreadsheet.) a. Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Marsh's stock over this period? c. What is the geometric average rate of return earned by investing in Marsh's stock over this period? d. Considering the beainning and endina stock prices for the five-vear period are the same, which type of average rate of return (the arithmetic or geometric) better describes the average annual rate of return earned over the period? a. The annual rate of return at the end of year 2 is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer. ? Question Help P7-8 (similar to) (Related to Checkpoint 7.2) (Calculating the geometric and arithmetic average rate of return) Marsh Inc. had the following end-of-year stock prices over the last five years and paid no cash dividends: Time Marsh 1 $8 2 11 3 18 4 6 5 8 (Click on the icon in order to copy its contents into a spreadsheet.) a. Calculate the annual rate of return for each year from the above information. b. What is the arithmetic average rate of return earned by investing in Marsh's stock over this period? c. What is the geometric average rate of return earned by investing in Marsh's stock over this period? d. Considering the beainning and endina stock prices for the five-vear period are the same, which type of average rate of return (the arithmetic or geometric) better describes the average annual rate of return earned over the period? a. The annual rate of return at the end of year 2 is %. (Round to two decimal places.) Enter your answer in the answer box and then click Check
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