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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

7 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:
\table[[SO Return,CC Return],[2016,(20.00%),(5.00%),],[2017,42.00,15.00,],[2018,20.00,(13.00),],[2019,(8.00),50.00,],[2020,25.00,12.00,]]
A What is the average rate of return for Sun Oil and Carl's Cafes over the 2016 to 2020 period? 2
B Your client Ms. Jacob is considering a portfolio of 50% in each stock. What was the realized rate of return on the portfolio in each year (2016-2020)?5
C What would have been the average return on the portfolio return during this period? 1
D What is the standard deviation for SO,CC and the
portfolio? 3
E Ms. Jacob is a risk averse investor, what should you recommend SO,CC or the portfolio? Explain your recommendation.
4
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