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If possible show work ​(Calculating the geometric and arithmetic average rate of​ return)  The common stock...

If possible show work

​(Calculating the geometric and arithmetic average rate of​ return)  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

8

3

10

4

23

5

29

a.  Calculate the annual rate of return for each year 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 1 year ago
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