(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time 1 2 3 Brangus cattle Comapny $14 11 4 5 12 21 25 (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 Brangus Cattle Company's stock over this period? a. The annual rate of return at the end of year 2 is ☐ %. (Round to two decimal places.)
(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid no cash dividends: Time 1 2 3 Brangus cattle Comapny $14 11 4 5 12 21 25 (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 Brangus Cattle Company's stock over this period? a. The annual rate of return at the end of year 2 is ☐ %. (Round to two decimal places.)
Chapter13: Direct Foreign Investment
Section: Chapter Questions
Problem 1IEE
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Transcribed Image Text:(Calculating the geometric and arithmetic average rate of return) The common stock of the Brangus Cattle Company had the following end-of-year stock prices over the last five years and paid
no cash dividends:
Time
1
2
3
Brangus cattle Comapny
$14
11
4
5
12
21
25
(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 Brangus Cattle Company's stock over this period?
a. The annual rate of return at the end of year 2 is ☐ %. (Round to two decimal places.)
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