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Jane is considering investing in three different stocks or creating three distinct preadsheet Exercise CHAPTER 8 Flisk and Return stock portfolios. Jane considera herself to

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Jane is considering investing in three different stocks or creating three distinct preadsheet Exercise CHAPTER 8 Flisk and Return stock portfolios. Jane considera herself to be a rather conservative investor. She to obtain forecasted returns for the three securities for the years 2015 through 202 The data are given in the following table. Year 2013 2016 2017 2018 2019 2020 2021 Stock A 10% 13 15 14 16 14 12 Stock B -10% 11 1 12 10 IS 15 Stock C 12% 14 10 11 9 9 10 In any of the possible two-stock portfoliot, the weight of each stock in the portfolie will be 50%. The three possible portfolio combinations are AB, AC, and BC. TO DO Create a spreadsheet similar to Tables 8.6 and 8.7 to answer the following: 1. Calculate the expected return for each individual stock. b. Calculate the standard deviation for each individual stock. Calculate the expected returns for portfolios AB, AC, and BC. d. Calculate the standard deviations for portfolios AB, AC, and BC. & Would you recommend that Jane invest in the single stock A or the portfolio consisting of stocks A and B? Explain your answer from a risk-return viewpoint . Would you recommend that Jane invest in the single stock B or the portfolio consisting of stocks Band C Explain your answer from a risk-return viewpoint. ancelab Visit www.myfinancolab.com for Chapter Case: Analyzing Risk and Return on Chargers Products' Investments, Group Exercises, and numerous online resources

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