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help 8 - 2 0 REALIZED RATES OF RETURN Stocks A and B have the following historical returns: a . Calculate the average rate of
help REALIZED RATES OF RETURN Stocks A and B have the following historical returns:
a Calculate the average rate of return for each stock during the period through
b Assume that someone held a portfolio consisting of of Stock A and of Stock B
What would the realized rate of return on the portfolio have been each year? What would the
average return on the portfolio have been during this period?
c Calculate the standard deviation of returns for each stock and for the portfolio.
d Calculate the coefficient of variation for each stock and for the portfolio.
e Assuming you are a riskaverse investor, would you prefer to hold Stock A Stock B or the
portfolio? Why?
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