According to the NYSE Composite Index, the stock market returns from 2006 through 2010 were as follows:

Year NYSE Return

2006....................................17.9%

2007.........................................6.6

2008.......................................40.9

2009.......................................24.8

2010.......................................10.8

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 2010 if he or she invested $2,000 in the NYSE index at the beginning of 2006.

d. Using the annual returns given in the table, compute the value of a $2,000 initial investment at the end of each year.