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You are considering an investment in either individual stocks or a portfolio of stocks. Th [ o ? two stocks you are researching, Stock A
You are considering an investment in either individual stocks or a portfolio of stocks. Tho
two stocks you are researching, Stock A and Stock B have the following historical returns:
a Calculate the average rate of return for each stock during the year period.
b Suppose you had held a portfolio consisting of of Stock A and 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?
c Calculate the standard deviation of returns for each stock and for the portfolio.
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