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Historical Realized Rates of Return You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching,

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Historical Realized Rates of Return You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year 2014 2015 2016 2017 2018 -22.80 % 39.25 24.75 -6.75 34.50 -5.50 % 20.30 -10.20 48.10 16.25 a. Calculate the average rate of return for each stock during the 5-year period. Do not round Intermediate calculations. Round your answers to two decimal places Stock A! Stock B: b. Suppose you had held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Do not round intermediate calculations. Round your answers to two decimal places. Negative values, if any, should be indicated by a minus sign. Portfolio Year 2014 2015 2016 2017 2018 Average return c. Calculate the standard deviation of returns for each stock and for the portfolio. Do not round intermediate calculations. Round your answers to two decimal places. Portfolio Std d. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? Why? A risk-averse investor should choos -Select- , since it offers -Select- expected return with Select B risk. Stock Portal d. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? Why? A risk-averse investor should choose Select since it offer Select expected return with Select risk. the same d. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only cholces, would you prefer to hold Stock A, Stock B, or the portfolio? Why? A risk-averse investor should choose Select B. since it offers Select expected return wit risk. Select higher

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