t0 Question 2 (25 marks, 5 marks each) Stock A and B have the following historical returns: Stock B's Returns, R YearStock A's Returns, Ra 1998 1999 2000 2001 (8.0%) 23.0% 15.0% (0.5%) 27.0% (45%) 11.8% 30.5% (7.6%) 6.3 culate the average rate of return for each stock during the period 1998 through 2002 (1) Cal (2) Assume that someone held a portfolio consisting of 50 percent of Stock A and 50 percent of Stock B. What would have been the rate of return on the portfolio in each year from 1998 through 2002? What would have been the average return on the portfolio during this period? (3) Calculate the standard deviation of returns for each stock and for the portfolio? (4) paiculate the coefficient of variation ( ? ) for two stocks. (5) If you are a risk-averse investor, would you prefer to hold Stock A, Stock B or the portfolio? Why