Question
ou are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B,
ou 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 2015 -16.00 % -4.00 % 2016 41.00 15.00 2017 27.00 -12.00 2018 -7.00 53.00 2019 22.00 15.00
-
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: %
-
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.
Year Portfolio 2015 % 2016 % 2017 % 2018 % 2019 % Average return % -
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. Dev. % % %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started