Problem
The Diagonal Stamp Company, which sells used postage stamps to collectors, advertises that its average price has increased from $1 to $5 in the last 5 years. Thus, management states, investors who had purchased stamps from Diagonal 5 years ago would have received a 100% rate of return each year.
(a) To check their calculations, compute the annual rate of return.
(b) Why is your computed rate of return less than 100%?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.