A stock has the following stock information: Year Stock Price 2014 $ 22.75 2015 $ 22.00...
A stock has the following stock information:
|
Year |
Stock Price |
|
2014 |
$ 22.75 |
|
2015 |
$ 22.00 |
|
2016 |
$ 23.75 |
|
2017 |
$ 26.00 |
What is the arithmetic average return of this stock? ENTER YOUR ANSWER AS A PERCENTAGE WITH ONE DECIMAL PLACE (e.g., 12.1) AND NOT AS A DECIMAL (e.g., 0.121). ROUND TO THE NEAREST TENTH OF A PERCENT. DO NOT USE THE PERCENT SIGN (%) IN YOUR ANSWER.
Homework Answers
Average Return in 2015 = (22 - 22.75)/22.75 = -3.30%
Average Return in 2016 = (23.75 - 22)/22 = 7.95%
Average Return in 2017 = (26 - 23.75)/23.75 = 9.47%
Average Growth Rate = (-0.033 + 0.0795 + 0.0947)/3
Average Growth Rate = 4.71%
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