##### Finance Geometric and arithmetic returns

label Business
account_circle Unassigned
schedule 1 Day
account_balance_wallet \$5

A stock has had the following year-end prices and dividends:

 Year Price Dividend 1 \$ 43.15 - 2 48.13 \$ 0.45 3 57.05 0.49 4 45.13 0.55 5 52.05 0.62 6 61.13 0.68

What are the arithmetic and geometric returns for the stock? (Round your answers to 2 decimal places. (e.g., 32.16))

Oct 19th, 2017

Thank you for the opportunity to help you with your question!

return = (this period's p - last period's p + dividend)/last period's p; answer in percentage

arimetic return = (return1 + return2 + ...)/6 periods

geometric return = [(1+ return1)(1+ return2)(1+..)...]root to  periods

51.106

52.10
Hope this helps

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 20th, 2015

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Oct 19th, 2017
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Oct 19th, 2017
Oct 20th, 2017
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