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A stock has the following year end prices and dividends. What are the arithmetic and geometric average annual returns for the stock over this time period? What is the standard deviation of returns (use the arithmetic average)?

Year     Price    Dividend

1                    $73.15       -

2                   78.13    $2.45

3                   82.05      2.49

4                    76.13      2.55

5                   77.05      2.62

a. The arithmetic average is 4.56%, the geometric average is 4.72%, and the standard deviation is 39.87%

b. The arithmetic average is 5.72%, the geometric average is 5.56%, and the standard deviation is 39.87%

c. The arithmetic average is 4.72%, the geometric average is 4.56%, and the standard deviation is 6.32%

d. The arithmetic average is 4.56%, the geometric average is 4.72%, and the standard deviation is 6.32%

e. The arithmetic average is 4.72%, the geometric average is 4.56%, and the standard deviation is 39.87%

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M91382326

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