Consider the following information on large-company stocks for a period of years.Large-company stocksInflationArithmeticMean15.3%3.5a. What was the arithmetic average annual return on large-company stocks in nominalterms? (Do not round intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)b. What was the arithmetic average annual return on large-company stocks in realterms? (Do not round intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)Answer is complete but not entirely correct.a.Nominal return15.30%b.Real return11.80%

1.The nominal rate of return is the rate of return earned on an investment before adjusting for…

Answered: Consider the following information on…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 2MAD

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Consider the following information on large-company stocks for a period of years. Arithmetic Mean 12.78 3.3 Large-company stocks Inflation a. What was the arithmetic average annual return on large-company stocks in nominal terms? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. What was the arithmetic average annual return on large-company stocks in real terms? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Nominal return b. Real return 12.70% 10.26 %
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A stock has had the following year-end prices and dividends: Year Price 1 $65.03 23456 71.90 77.70 63.97 74.51 86.75 Dividend - $.74 .79 .85 .94 1.01 What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Arithmetic average return Geometric average return % %
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