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Year TA -15.30% 2014 2015 TB -8.90% 18.20 2016 -13.10 33.50 25.25 -5.75 23.25 2017 46.10 18.65 2018 a. Calculate the average rate of return
Year TA -15.30% 2014 2015 TB -8.90% 18.20 2016 -13.10 33.50 25.25 -5.75 23.25 2017 46.10 18.65 2018 a. Calculate the average rate of return for each stock during the 5-year period. Do not round intermediate calculations. Round your answers to two decimal places. Stock A: 12.19 % Stock B: 12.19 % 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. Portfolio % % Year 2014 2015 2016 2017 2018 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. TA TA % Portfolio % Std. Dev. % 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 Stock A, since it offers the same expected return with less A V risk
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