Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stocks A and B have the following historical returns: Year Stock A's Returns, ra Stock B's Returns, rB 2014 (15.10%) (14.50%) 2015 40.00 16.30

image text in transcribedimage text in transcribed

Stocks A and B have the following historical returns: Year Stock A's Returns, ra Stock B's Returns, rB 2014 (15.10%) (14.50%) 2015 40.00 16.30 2016 12.00 2017 2018 (5.50) 28.25 28.80 (11.00) 40.05 a. Calculate the average rate of return for each stock during the period 2014 through 2018. 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 Portfolio 2014 % 2015 % 2016 % 2017 2018 % % 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

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

Derivatives Markets

Authors: Rober L. Macdonald

4th edition

321543084, 978-0321543080

More Books

Students also viewed these Finance questions