Question: plesse help with c d and e b. Colculate both the artimetic and the gecenotric mean rates of return for the entie theee-year peried using



b. Colculate both the artimetic and the gecenotric mean rates of return for the entie theee-year peried using your annual rales of retum trom part a iNote you may assume that nelafer firm pays any dividends .) c. Compute a three year rale of retum spanhing the entre period (le, using the ending price for period 1 and ensing price for perbd 4 ) d. Since the rate of return calculated in part c is a thee year rate of yotirn, corvert it io an anceual tafe of return by using the following equation e. How is the anneal rabe of retum catculated in part d related to the geometric rate of return? When yes are evaluating the perlormence of an investrient that has been helid fo: several years, What type of average rate of return (artevetic or gooneterc) shisuld ydu ses? Why? (Solving a comprehensive problem) Use the end-ofyear stock price data in the popup window. to answer the following questions for the Harris : a. Compute the annual rates of return for each time period and for both firms. Enter the annual rate of return for each year for Pirwheel in the table below. (Round to two decimal places.) b. The arithmetic average rate of return eamed by investing in Harris stock over this period is 14.22% (Round to two decimal places ) (Solvina a comprehensive orobleml Uee the end-olvear stock orice data in the cooub window to answer the followine auestions for the Harris and Pinwheel comoanies Tho geometric average rate of retum eamed by investhg in Harnis stock corer this period is 6. (Round to two decimal places) The geometric average rate of return oamed by investing in Pinwheel stock over this peilod bs 6. (Round to wo decimal places) c. The three-year rate of relurn spanning the ontire peried for Haris is 5 (Round to two decinal places) The three-yeat rate of retuen spanning the entie pevied for Pirwheol is (Round to two decimal places) d. The annual rate of return conveitod from the three-yoar rate in part c for Hantis is (Round ta twe decmal places) -The annual rate of return converted from the three year rate in part c for Pinvbeet is 4. (Round to two decimal places.) e. How is the annual rate of ieturn cakcidated in part d ielated to the geometric rate of roturn? (Select the beat choice below ) A. The annual tate of rotum calculated in part d is nething but the geonetic average rate of retien calculatod in a difterent way B. The anhual rate of return calculated in part d is nothisg but thei anthonese average rate of retum calculbled in a silferent woy C. The annual iate of retim calcilated in part d is the sme as the georsetric fate of rhturm in this problem but this is only a coinchdence 0. The annual rate of return cakculated in pait d is not related to the geametric average rate of refum When you are evaluating the perfommance of an iriestment that has been held for several years what lype of average rale of retuin (arithmetc or geometric) ahould you use? Why? (Select the best choice below) A. Goonsetric average return better describes the average annual rate of cetura ever a period because it is a simple averege, so it answers the question concething the rexpected rate of ietum over a period. Q. The aritimetic rate of refurn should be used. it betler describes the avecage answal rate of retian over a period bectuse it compounds at the same rate while the geometric rate of rotum is bet used lor a single peibd C. The geometic rate of felum should be used it better describes the average annual rate of refan ovet a period because it compounds at she same tate while the arithinetic rate of refurs is best used for a single perlod expecied rate of rehim over a period
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