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Arithmetic and Geometric Returns

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P 12-16. Arithmetic and Geometric Returns

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

Year Price Dividend
---------------------------------------------------------
1 $ 52.22 --
2 52.58 $ 0.55
3 50.56 0.6
4 51.27 0.63
5 62.46 0.72
6 68.53 0.73

The arithmetic and geometric returns for the stock are _____ percent and _____ percent, respectively. (Input answers as a percent rounded to 2 decimal places, without the percent sign).

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Solution Summary

The solution determines the arithmetic and geometric returns for the stock in percentages respectively (see Excel spreadsheet attached).

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