A stock had returns of 18%, 15%, 13%, 2%, 13%, and 17% over the last six years. Required: 1. What is the arithmetic return for the stock? a. 15.60% b. 13.20% c. 13.65% d. 13% e. 13.10% 2. What is the geometric return for the stock? a. 13.24% b. 12.97% c. 12.87% d. 12.67% e. 15.64%

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 17P
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A stock had returns of 18%, 15%, 13%, 2%, 13%, and 17% over the
last six years.
Required:
1. What is the arithmetic return for the stock?
a. 15.60%
b. 13.20%
c. 13.65%
d. 13%
e. 13.10%
2. What is the geometric return for the stock?
a. 13.24%
b. 12.97%
c. 12.87%
d. 12.67%
e. 15.64%
Transcribed Image Text:A stock had returns of 18%, 15%, 13%, 2%, 13%, and 17% over the last six years. Required: 1. What is the arithmetic return for the stock? a. 15.60% b. 13.20% c. 13.65% d. 13% e. 13.10% 2. What is the geometric return for the stock? a. 13.24% b. 12.97% c. 12.87% d. 12.67% e. 15.64%
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