The Allied Group has acquired Kramer Industries and is now considering additional investments. They have determined that there is a firm that is a good fit for their portfolio, the Kramer firm of Montana. The firm was established in 1990 and has the following historical returns:

Kramer Industries
Year	Earnings
1990	(8% Loss)
1995	23%
2000	26%
2005	31%
2010	18%

Address all of the following questions:

• What was the average return for the stock over the period of 1990 through 2010?
• What was the standard deviation for the stock over this period?
• Assume that you currently have a portfolio that returns 19.5%. Adding this stock to the current portfolio, what will happen to the average return on the portfolio?
• Should Allied invest in the stock? Why or why not