Question
The table below shows the historical rates of return (including dividends) for two stocks: Year Stock A Stock B 2022 8% -3% 2021 12% 22%
The table below shows the historical rates of return (including dividends) for two stocks:
| Year | Stock A | Stock B |
|---|---|---|
| 2022 | 8% | -3% |
| 2021 | 12% | 22% |
| 2020 | 8% | 20% |
| 2019 | 4% | -12% |
Stock A makes up 20% of the value of portfolio, and stock B makes up the rest. Calculate the portfolio return for each year. What was the average annual portfolio return over all years? Answer in 3+ decimals.
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the portfolio return for each year you can use the weighted average formula since the s...
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
