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Compute the arithmetic mean annual rate of return for each stock. Which stock is most desirable by this measure?

by | May 22

During the past five years, you owned two stocks that had the following annual rates of return:
Year Stock T Stock B
1 0.19 0.08
2 0.08 0.03
3 –0.12 –0.09
4 –0.03 0.02
5 0.15 0.04
a. Compute the arithmetic mean annual rate of return for each stock. Which stock is most desirable by this measure?

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