Question: b. You have found an asset with an arithmetic average return of 13.80 percent and a geometric average return of 10.48 percent. Your observation period
b. You have found an asset with an arithmetic average return of 13.80 percent and a geometric average return of 10.48 percent. Your observation period is 30 years. What is your best estimate of the return of the asset over the next 5 years? 10 years? 20 years? 5 years 10 years 20 years
c. A stock has returns of 4 percent, 10 percent, 7 percent, 15 percent, and 7 percent. What are the arithmetic and geometric returns?
d.
A stock has had the following year-end prices and dividends:
| Year | Price | Dividend | |||||||||
| 0 | $ | 17 | |||||||||
| 1 | 19.18 | $ | 0.15 | ||||||||
| 2 | 20.18 | 0.37 | |||||||||
| 3 | 18.68 | 0.39 | |||||||||
| 4 | 21.02 | 0.40 | |||||||||
| 5 | 24.13 | 0.47 | |||||||||
What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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