Question

According to the NYSE Composite Index, the stock market returns from 2009 through 2013 were as follows:
Year NYSE Return
2009 .......... 26.1%
2010 .......... 9.8
2011 .......... 6.1
2012 .......... 11.2
2013 .......... 24.5
a. Compute the simple arithmetic average return for the NYSE for the five-year period.
b. Compute the geometric average return for the NYSE for the five-year period.
c. Based on your answer in part (b), compute the dollar value that an investor would have at the end of 2013 if he or she invested $2,000 in the NYSE index at the beginning of 2009.
d. Using the annual returns given in the table, compute the value of a $2,000 initial investment at the end of each year.



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  • CreatedNovember 24, 2014
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