# Arithmetic mean / geometric mean

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEMS The Common stock of X-tech

Inc had the following historic pattern:

The Common stock of X-tech Inc had the following historic pattern:

Time Price

3/1/96 50.00

3/1/97 57.00

3/1/98 66.12

3/1/99 74.05

3/1/00 70.35

3/1/01 77.39

1. What was your arithmetic mean annual yield for the investment in X-Tech Industries?

2. Same data as prior question: What was your geometric mean annual yield for the investment in X-Tech?

Please show calculations.

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#### Solution Preview

1. What was your arithmetic mean annual yield for the investment in X-Tech Industries?

To calculate the arithmetic mean annual yield. We first need to calculate the annual yield

Annual yield = (Price last year - Price this year)/Price last year

The ...

#### Solution Summary

The solution explains how to calculate the arithmetic mean and the geometric mean in the given problem