You are considering an investment in either individual stocks or a portfolio of stocks The two stocks you are researching, stocks A and B, have the following historical returns year Ar Br 2008 20 00 25 00 2009 42 00 15 00 2010 20 00 213 00 2011 8 00 50 00 2012 25 00 12 00 a Calculate the average ra...

The answers to a b c and d are given below A B Portfolio 2008 2000 500 1250 2009 4200 1500 28 ...

You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks

Question:

You are considering an investment in either individual or a of The two you are researching, A and B, have the following historical returns:
year Ar Br
2008..........-20.00%..........25.00%
2009............42.00...........15.00
2010............20.00..........213.00
2011............-8.00............50.00
2012............25.00............12.00
a. Calculate the average rate of return for each stock during the 5-year period.
b. Suppose you had held a consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the in each year? What would have been the average return on the during this period?
c. Calculate the standard deviation of returns for each stock and for the Calculate the coefficient of variation for each stock and for the If you are a risk-averse investor then, assuming these are your only choices, would you prefer to hold Stock A, Stock B, or the Why?
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...