General Electric (GE) is one of the world's largest companies; it develops, manufactures, and markets a wide range of products, including medical diagnostic imaging devices, jet engines, lighting products, and chemicals. In 2010, the stock price rose 17.73%, and in 2011, the stock price rose 1.38%.
Source: Data extracted from flnance.yahoo.com, June 24, 2012.
a. Compute the geometric mean rate of return per year for the two-year period 2010-2011.
b. If you purchased $1,000 of GE stock at the start of 2010, what was its value at the end of 2011?
c. Compare the result of (b) to that of Problem 3.20 (b).