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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:
a. 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. % b. 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.
e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio?\ |
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