A stock has had the following yearend prices and dividends Y

A stock has had the following year-end prices and dividends: Year Price Dividend 1 $ 64.23 — 2 71.10 $ 0.58 3 76.90 0.63 4 63.17 0.69 5 72.91 0.78 6 78.75 0.85 Required: What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Arithmetic average return % Geometric average return %

Solution

Geometric mean =Geometric Mean = ((X₁)(X₂)(X₃)........(X_N))^1/N

= 0.00045