What would be johns average return per year for that

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Reference no: EM132238727

Please give your responses to each of the following questions.

1. What is John's annual average return on the following returns that he earned in the last two years?

First year: -50%

Second year: 100%

(1) John bought a stock for $100 per share at the beginning of the first year, and at the end of that year the stock's price dropped to $50. So, John's first year's return was -50%.

(2) John had kept the stock, and at the end of the second year that stock's price jumped to $100. What was his second year's return?

(3) What would be John's average return per year for that two-year period?

(4) Did that average return make sense to you? Why or why not?

(5) How would you fix it to make it sensible if you do not feel it makes sense to you,

3.
(1) What have you learned from the above calculations? Specifically, what "average" concepts have you learned from the above questions?

(2) Can you think of other examples in business or in your daily life that could be applied to the "average" concepts and calculations shown above?

Reference no: EM132238727

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