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7 You are an analyst reviewing Sun Oil ( SO ) and Carl's Cafes ( CC ) as an investment in either individual stocks or
You are an analyst reviewing Sun Oil SO and Carl's Cafes CC as an investment in either individual stocks or a portfolio of stocks. Research has provided each company's historical returns in the table below:
tableSO Return,CC Return
A What is the average rate of return for Sun Oil and Carl's Cafes over the to period?
B Your client Ms Jacob is considering a portfolio of in each stock. What was the realized rate of return on the portfolio in each year
C What would have been the average return on the portfolio return during this period?
D What is the standard deviation for and the
portfolio?
E Ms Jacob is a risk averse investor, what should you recommend SO or the portfolio? Explain your recommendation.
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