Arithmetic mean / geometric mean

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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

$2.49