question archive A stock has had the following year-end prices and dividends: Year Price Dividend 1 $ 43
A stock has had the following year-end prices and dividends: Year Price Dividend 1 $ 43
Subject:FinancePrice:2.85 Bought3
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A stock has had the following year-end prices and dividends: |
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Year |
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Price |
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Dividend |
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1 |
|
$ |
43.27 |
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- |
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2 |
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48.25 |
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$ |
0.45 |
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3 |
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57.17 |
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0.48 |
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4 |
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45.25 |
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0.60 |
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5 |
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52.17 |
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0.65 |
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6 |
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61.25 |
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0.73 |
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|
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What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))
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Arithmetic return |
?? % |
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Geometric return |
?? % |
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Please find the answers as follows:
| Year | Price | Dividend | Annual Return | |||
| 1 | 43.27 | 0 | 0 | |||
| 2 | 48.25 | 0.45 | 12.55% | |||
| 3 | 57.17 | 0.48 | 19.48% | |||
| 4 | 45.25 | 0.6 | -19.80% | |||
| 5 | 52.17 | 0.65 | 16.73% | |||
| 6 | 61.25 | 0.73 | 18.80% | |||
| Arithmetic Return = (12.55 + 19.48 -19.8 + 16.73 + 18.8)/5 = 9.552% or 9.6% Geomatric Return = [(1+.1255)*(1+.1948)*(1-.1980)*(1+.1673)*(1+.1880)]^1/5 - 1 = 8.38% |
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