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20. Problem 8.20 (Realized Rates of Return) eBook Stocks A and B have the following historical returns: Year Stock A's Returns, A Stock B's Returns,
20. Problem 8.20 (Realized Rates of Return) eBook Stocks A and B have the following historical returns: Year Stock A's Returns, A Stock B's Returns, rB 2013 - 23.30% - 15.50% 2014 20.10 20.00 10.00 2015 31.60 - 12.80 2016 - 2.50 2017 27.25 8.05 a. Calculate the average rate of return for stock A during the period 2013 through 2017. Round your answer to two decimal places. Calculate the average rate of return for stock B during the period 2013 through 2017. Round your answer to two decimal places. b. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would the realized rate of return on the portfolio have been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign. Year Portfolio 2013 2014 2015 2016 2017 What would the average return on the portfolio have been during this period? Round your answer to two decimal places. c. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B Portfolio Standard Deviation d. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B Portfolio e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? -Select
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