Bobby will get annual returns of 13.0%, -8.0%, -9.5%, 5.0%, and 7.4% in the next five years on her investment in My Town, Inc. stock, which she purchases for $42,000 today. (Assume NO dividends during the 5 years and all annual returns are associated with the stock price/value).
What is the arithmetic average return on her stock if she sells it five years from today? (show as percent and round to 2 decimal places)
What is the geometric average return on her stock if she sells it five years from today? (show as percent and round to 2 decimal places)
How much will Bobby's stock be worth if she sells it five years from today? Hint: your Rate of Return formula can be rewritten to solve for Ending Price like this Ending Price = Beginning Price x (1+ROR)...(round your answer to nearest $1)