vesity Punal for students, Ch 12 Assignment and Part Assignm Ch 02: Assignment Risk and Return: Part 1 Historical eauzeo ates of Keturn You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year YA 2014 -23.30% 2015 34.00 -6.90% 19.70 2016 22.75 -14.60 2017 2018 3.25 32.25 54.90 9.35 a. Calculate the average rate of retum for each stock during the 5-year period. Do not round intermediate calculations. Round your answers to two decimal places. Stock A Stock B b. Suppose you had held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Do not round intermediate calculations. Round your answers to two decimal places. Negative values, if any, should be indicated by a minus sign Year 2014 2015 2016 2017 2018 Portfolio % Average return c. Calculate the standard deviation of returns for each stock and for the portfolio. Do not round intermediate calculations. Round your answers to two decimal places. Std. Dev. PA % Portfolio % d. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? Why? A risk-averse investor should choose See since it offers se expected return with set Brisk Wake Up