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The common stock of the Brangus Cattle Company had the following​ end-of-year stock prices over the...

The common stock of the Brangus Cattle Company had the following​ end-of-year stock prices over the last five years and paid no cash​ dividends:

Time

Brangus cattle Comapny

1

​$13

2

10

3

14

4

20

5

27

a.  Calculate the annual rate of return for EACH YEARr from the above information.

b.  What is the arithmetic average rate of return earned by investing in Brangus Cattle​ Company's stock over this​ period?

c.  What is the geometric average rate of return earned by investing in Brangus Cattle​ Company's stock over this​ period?

d.  Which type of average rate of return best describes the average annual rate of return earned over the period​ (the arithmetic or​ geometric)? ​ Why?

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 2 years ago
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