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