Over the last six years the shares of company XYZ's stock had returns of 20 percent,...

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Question

Over the last six years the shares of company XYZ's stock had returns of 20 percent,...

Over the last six years the shares of company XYZ's stock had returns of 20 percent, 16 percent, 15 percent, 14 percent, 20 percent, and 11 percent.

Required:
(a)	Calculate the arithmetic average return.

	(Click to select) 16.10% 16.00% 16.80% 16.20% 19.20%

(b)	Calculate the geometric average return.

	(Click to select) 15.96% 19.44% 15.76% 16.24% 16.06%

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Answer 1

Answer #1

year returns 20.00% 16.00% 15.00% 14.00% 20.00% 11.00% 16.00% Arithmetic average return = [0.20+0.16+0.15+0.14+0.20+0.11 ]:6 Geometric average return = (1.20 x 1.16 x 1.15 x 1.14 x 1.20 x 1.11 ) -1/5-1 = 15.96%

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Answer 2

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