Calculate annual arithmetic mean and geometric mean return

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Reference no: EM131899796

Calculate the annual arithmetic mean and geometric mean return on the following security, purchase price = $27; first-year dividend = $6; price after one year = $32; second-year dividend = $6; selling price after two years = $25. (Round intermediate calculations to 3 decimal places, e.g. 15.251% and the final answers to 2 decimal places, e.g. 15.25%.)

Arithmetic average return? %

Geometric mean return ? %

State which method is more appropriate for the situation.

Reference no: EM131899796

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