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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

  • 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%. If you add this stock to the current portfolio, what will happen to the average return on the portfolio?
  • Should Allied invest in the stock? Justify your response.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%

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