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The returns on a stock for the last 6 years have been -25%, 8%, 36%, -40%, 41%, and -2%. Assume that you purchased the stock
The returns on a stock for the last 6 years have been -25%, 8%, 36%, -40%, 41%, and -2%. Assume that you purchased the stock 6 years ago for $40.00 and that all returns have come in the form of either capital gains or losses (i.e., there have been no dividends). (3 points)
a. What is the price of the stock today?
b. Compute the average (arithmetic) annual return.
c. Compute the geometric average annual return.
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