(Solving a comprehensive problem Use the end of year stock price data in the popup window, to nwwer the following questions for the Harris and Pinwheel companies a. Compute the annual rates of run for each time period and for both b. Calculate both the hell and the geometric mean rates of retum for the entire three-year period using your annual rates of return from porta. (Note: you may assume that the form pays any dividends) c. Computea three-year rate of return spanning the entire periode using the ending price for period 1 and ending price for period 4) d. Since the rate of return calculated in partcate your rate ofrem convert it to an annual rate of return by using the following equation Three-Year Rate of Return . Amulate of Return e. How is the annuale of return calculated in part delated to the geometric rate of rom? When you are valuating the performance of an investment that has been held for several years, what type of werage rate of return arithmetic or geom) should you? Why? a. Enter the annual te ofrem for each year for Harris in the table below Round to two decimal places) Value of Time Annual Rate Value of Annual Reve Harris Stock of Return Pinwheel Stock of Return 1 $9 $17 2 10 32 16 4000 29 4 17 2143 27 O (Solving a comprehensive problem) Use the end of your stock proe data in the popup window. Ito answer the following questions for the Harris and Pinwheel companies a. Com the annual rates of return for each time period and for both b. Calculate both the arithmetic and the geometric mean rates of return for the entire three year period using your annual rates of return from purta (Note: you may assume that other from paysany dividende) c. Compute a three-year rate of return spanning the entire periode, using the ending price for period 1 and ending price for period 4) d. Since the role of return calculated in partc is a three-year rate of retum, convert to an annual rate of return by using the following equation H- Three-Year 1. Annual Rate Rate of Retum of Raum e. How is the annual rate of return calculated in part d related to the geometric rate ofreu When you are evaluating the performance of an investment that has been held for several years, what type of average rate of retum (arithmetic or geometric) should you use? Why? Enter the annual rate of return for each year for Pinwheel in the table below (Round to two decimal places) Tiene Value of Annual Rate Vio Annual Rate Harris Stock of Return Pinwheel Stock of Retur 1 $9 517 2 10 11.11% 32 14 4000 29 4 11 21.43% 27 DOD (Solving a comprehensive problem Use the end of year old in the popup window, to answer the belowing questions for the Hans and companies a. Compute the annual rates of return for each time period and for both me b. Calculate both the aim and the geometric means of return for the year period using your annual rates of room from purta (Note: you may assume that neither form pays any vidends) c. Computer three year rate of return spanning the entire periode using the ending pile for period 1 and ending price for period 4) d. Since the rate ofron calculated in partes a three-year rate of retum, convert to an annual rate of return by using the following ustion 1+ Three-Year Annual Rate Rate of Rebam of Return e. How is the annual rate of return calculated in part d related to the geometric rate of reum? When you are evaluating the performance of an investment that has been held for several years, what type of average rate of retum Carithmetic or geometric) should you use? Why? b. The writtmatic average rate of return camed by vesting in Harris stock over this periodis) Round to tredicinal place) The arithmetic werage rate of returneamed by investing in Pinwheel stock over this periods Roond to two decimal places) The geomorke average rate of retum earned by investing in Hans ock over this period is * Round to two decimal places The geometrie verage rate of retur earned by investing in Pinwheel stock over this period 1 IN Round to two decimal places) c. The three you roto of retum spanning the entire period for Harris is 0% (Round the decimal places) (Solving a comprehensive problem) Use the end of year stock price data in the popup window, to answer the following questions for the Harris and Pinwheel companies a. Compute the walls of return for each time period and for both this b. Calculate both the artist and the geometric mean rates of retum for the entire three year period using your annual rates of return from parta (Note you may assume that the firm pays any dividends) c. Compute a three-year rate of return spanning the entire periode using the ending price for period 1 and ending price for period 4) d. Since there of our calculated in partc is a three year rate of return convert it to an annual rate of return by using the following equation 1+ Three-Year Rate of Return DE" 1. Annual Rate of Return e. How is the annual rate of retum calculated in part d related to the geometric rate of return? When you are waluating the performance of an investment that has been held for several years, what type of average rate of retum Carithmetic or geometric) should you use? Why? c. The three year rate of return spanning the entire period for Huis I (Round to two decimal place) The three-year rate of retum spanning the entire perlod for Pinwheel is (Round to two decimal places) d. The annual rate of retum converted from the three-year cute in parte for Harris is Round to two decimal places) The annual rate of retum converted from the three-year rate in parte to Pinwheels (Round to two decimal places) e. How is the annual rate of return calculated in part delated to the geometric rate of retum? Select the best choice below) (Solving a comprehensive problem is the end of year stock price data in the popup Window, to answer the following questions for the Harties and Piel companies a. Compute the annual rates of return for each time period and for bom b. Calate both the arithmetic and the geometric means often for the entire three-year period using your rules of return from parte Note you may me the firm pays any dividends) c. Computea tree year rate of return spanning the entire period using the ending price for period 1 and ending price for period 4) d. Since the rate of return calculated in partis a three years of reum, convert it to an annual rate of rebum by using the following equation Three Your Annual Re Rate of Raum of Return e. How is the annual rate of return calculated in particulated to the geometric rate of return? When you we wanting the performance of an investment that has been held for several years, what type of werage rate of retum (arithmetic or geome) should you use? Why? How is the annual rate of retum calculated in part de related to geometric rate of rotum? (Select the best choice below) O A The annual rate of return called in part is not related to the geometric average rate of retum OB. The annual rate of return calculated in part dels nothing but the geometric average rate of return calculated in a different way OC. The annual rate of return calculated in part is nothing but the withmetic average rate of retum calculated in a diferent way OD. The annual rate of return calculated in part is the same as the geometric rate of return in this problem but this is only a coincidence When you are evaluating the performance of an investment that has been held for several years what type of average rate of return (arithmetic or geometric) should you use? Why? (Select the best choice below) (Solving a comprehensive problems the end of year stock price data in the popup window to answer the following questions for the Harris and wheel companies a. Compute the annual rates of return for each time period and for both frs b. Calculate both the arthmetic and the geometric mean rates of return for the entire three-year period using your annual rates of return from parta (Now you may assume that the form pays any dividends) c. Compus a three year rate of return spanning the entire periode, using the ending price for period 1 and ending price for period 4) d. Since the rate of return calculated in partes a three-year rate of return, convert to an annual rate of return by using the following equation Three-Year Annual Re 1. 1+ Rate of Return of Return e. How is the annual rate of retum calculated in part d related to the geometric rate of return? When you are evaluating the performance of an investment that has been held for several years what type of werage rate of retum (arithmetic or geometric) should you use? Why? OD. The annual rate of return calculated in part d is the same as the geometric rate of in this problem but this is only a coincidence When you are evaluating the performance of an investment that has been held for several years what type of average rate of retum (arithmetic or geometric) should you use? Why? (Select the best choice below) O A. Arithmetic average return beter describes the average annual rate of return over a period because is a simple average so knows the question concerning the expected rate of retum over a period O B. Geometric average return better describes the average annual rate of return over a period because it is a simple average, so answer the question concerning the expected rate of return over a period OC. The arthmetic rate of return should be used it better describes the average annual rate of return over a period because compounds at the same rate while the geometricate of retum is best used for a single period OD. The geometric rate of return should be used it better describes the average annual rate of return over a period because it compounds at the same rate wethewithmetic rate of return is best used for a single period