The returns on a stock for the last 6 years have been -25%, 8%, 36%, -40%, 41%, and 4%. a) Assuming that you purchased the stock for $100.00 six years ago and that all returns have come in the form of either capital gains or losses (i.e., there have been no dividends), what is the price of the stock today? b) Compute the average (arithmetic) return. c) Compute the geometric average return

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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The returns on a stock for the last 6 years have been -25%, 8%, 36%, -40%, 41%, and 4%.
a) Assuming that you purchased the stock for $100.00 six years ago and that all returns have come in the form of
either capital gains or losses (i.e., there have been no dividends), what is the price of the stock today?
b) Compute the average (arithmetic) return.
c) Compute the geometric average return.

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