Stock A and Stock B have the following historical returns:

Year	Stock A	Stock B
2004	-18.0%	14.5%
2005	33.0%	-21.8%
2006	15.0%	29.5%
2007	-0.5%	7.6%
2008	27.0%	26.3%

1. Calculate the average rate of return for each stock during this period.
2. Assume that someone held a portfolio consisting of 50 percent Stock A and 50 percent Stock B. What would have been the realized rate of return on the portfolio for each year? What would have the realized rate of return been over the period?
3. Using a spread sheet, calculate the standard deviation (s) for each stock and the portfolio.
4. Calculate the coefficient of variation for each stock and the portfolio.
5. If you are a risk averse investor, would you prefer Stock A, Stock B or the portfolio?