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Stocks A and B have the following historical returns: table [ [ Year , table [ [ Stock A ' s Returns, r
Stocks A and B have the following historical returns:
tableYeartableStock As Returns, rAtableStock Bs Returns, rB
i Calculate the average return for each stock during the period to
ii Assume that someone held a portfolio consisting of A and What would have been their realized rate of return on the portfolio in each year from to What would have been the average return on the portfolio during this period?
iii Calculate the standard deviation of returns for each stock and for the portfolio.
iv Calculate the coefficient of variation for each stock and for the portfolio.
v Assuming you are a riskaverse investor, would you prefer to hold Stock A Stock B or the portfolio? Why?
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