A stock had year-end prices of $42, $37, $44, and $46 over the past four years, respectively. Ignore the dividends.
(1) What are annual holding period returns for each year?
(2) What is the arithmetic average rate of return?
(3) What is the variance of the annual returns?
(4) What is the volatility of the annual returns (measured by the standard deviation)?
(5) What is the geometric average rate of return?