Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 - 19.30%

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 - 19.30% - 13.60%
2012 21.75 17.60
2013 11.50 37.80
2014 - 4.25 - 9.70
2015 31.50 9.10

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
Standard Deviation % % %
Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places.
Stock A Stock B Portfolio
CV

Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? -Select-Stock AStock BPortfolioItem 15

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Production And Operations Analysis

Authors: Steven Nahmias

6th Edition

0073377856, 9780073377858

More Books

Students also viewed these Finance questions