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Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2016 (20.30%) (16.10%) 2017 31.25 27.50
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2016 (20.30%) (16.10%) 2017 31.25 27.50 2018 10.50 38.40 2019 2020 (2.75) 28.50 (5.40) 2.80 a. Calculate the average rate of return for each stock during the period 2016 through 2020. Round your answers to two decimal places. Stock A: % Stock B: % 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 each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign. Year 2016 Portfolio % 2017 % 2018 % 2019 % 2020 % 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. Standard Deviation Stock A % Stock B % Portfolio % d. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. CV Stock A Stock B Portfolio e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? -Select-
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