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(Solving a comprehensive problem) Use the end-ol-year stock price data in the popup window, a. Compute the annual fates of retum for each time period

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(Solving a comprehensive problem) Use the end-ol-year stock price data in the popup window, a. Compute the annual fates of retum for each time period and for both firms. b. Calculate both the arithmesic and the geometric moan mates of return for the entive three-year period using your annual rates of return from part a. (Note: you may assume that neither firm pays any dividends.) c. Compute a three-year rate of return spanning the entire period (Le., using the ending price for petiod 1 and ending price for period 4 ) d. Since the rate of retum calculated in part c is a three-yoar rate of return, convert it to an annual rate of return by using the following equation: (Three-YearRateofReturn)=(1+ArnualRateofRetum)3 6. How is the annual rate of retum calculated in part d related to the geometric rate of return? When you are evaluating the performance of an investment that has been heid for several years, what type of average rate of retum (arithmetic or geometric) should you use? Why? a. Enter the annual rate of relum for each year for Harris in the table below. (Round to two decimal places.)

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