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Problem 8-20 Realized rates of return Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2009

Problem 8-20 Realized rates of return Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2009 - 17.50% - 17.30% 2010 34.75 28.00 2011 15.50 38.40 2012 - 5.25 - 5.90 2013 25.50 9.80 Calculate the average rate of return for stock A during the period 2009 through 2013. Round your answer to two decimal places. % Calculate the average rate of return for stock B during the period 2009 through 2013. Round your answer to two decimal places. % Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would the realized rate of return on the portfolio have been in each year? Round your answers to two decimal places. Year Portfolio 2009 % 2010 % 2011 % 2012 % 2013 % What would the average return on the portfolio have been during this period? Round your answer to two decimal places. % Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B Portfolio Std. Dev. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B Portfolio Coef. Var. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio?

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