(7-12) Stocks A and B have the following historical returns: YEAR 2000 2001 2002 2003 2004 Stock A's Return (%), KA (18.00) 33.00 15.00 (0.50) 27.00 S tock A's Return (%), KA (14.50) 21.80 30.50 (7.60) 26.30 7. What is Stock A's average rate of return for periods 2000 to 2004? a. 11.30% b. 20.79% c. 20.78% d. 11.25% e. None of the Above 8. What is Stock B's average rate of return for periods 2000 to 2004? a. 11.30% b. 20.79% c. 20.78% d. 11.25% e. None of the Above 9. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the average return on the portfolio during this period? a. 11.30% b. 20.79% c. 20.78% d. 11.25% e. None of the Above 10. Calculate the standard deviation of returns for each stock and for the portfolio a. ga= 20.79, or=20.78, GAR= 20.78 b. ga= 18.59, ak= 18.58, SAR= 20.13 C. ga= 20.79, OB= 20.78, GAR= 20.13 d. ga= 18.59, ar=20.78, JAR= 18.0 e. None of the Above 11. Calculate the coefficient of variation for each stock and the portfolio a. CVA= 1.84, CVB= 1.84, CVAB = 1.84 b. CVA= 1.65, CVB= 1.64, CVAB = 1.78 c. CVA= 1.65, CVB= 1.64, CVAB = 1.84 d. CVA= 1.84, CVB= 1.84, CVAB = 1.78 e. None of the Above 12. If you are a risk-averse investor, the following would be your preference. a. Prefer to hold any of stock A or B since they have the same expected returns. b. Prefer to hold the portfolio considering it has lesser risk. c. Indifferent with any of the stocks of portfolio since they are the same. d. Concentrate on Stock B since it has better historical performance. e. None of the Above