19. Arithmetic and Geometric Returns (LOI, CFA1) A stock has had the following year-end prices and dividends: Year Price Dividend 0 $13.25 1 15.61 $.15 2 16.72 .18 3 15.18 .20 4 17.12 .24 5 20.43 .28 What are the arithmetic and geometric returns for the stock? 20. Arithmetic versus Geometric Returns (LO1, CFA1) You are given the returns for the following three stocks: Year Stock A Stock B Stock C 1 8% 3% -24% 2 8 13 37 3 8 7 14 4 8 5 9 5 8 12 4 Calculate the arithmetic return, geometric return, and standard deviation for each stock. Do you notice anything about the relationship between an assets arithmetic return, standard deviation, and geometric return? Do you think this relationship will always hold