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
2011	- 18.10%	- 15.90%
2012	35.75	25.10
2013	13.25	22.50
2014	- 4.00	- 10.40
2015	28.25	33.85

Calculate the average rate of return for stock A during the period 2011 through 2015. Round your answer to two decimal places. % Calculate the average rate of return for stock B during the period 2011 through 2015. 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 each year? Round your answers to two decimal places. Enter a negative answer with a minus sign.

Year	Portfolio
2011	%
2012	%
2013	%
2014	%
2015	%

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? Portfolio-Select-Stock AStock BPortfolioItem 15