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	- 21.30%	- 16.70%
2010	26.75	29.70
2011	10.00	37.30
2012	- 3.00	- 14.50
2013	34.50	11.15

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.

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. % c. 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.

d. 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.

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