Question

Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's...

Stocks A and B have the following historical returns:

Year Stock A's Returns, rA Stock B's Returns, rB
2014 (20.90 %) (13.60 %)
2015 27.75 25.40
2016 13.50 39.10
2017 (4.75 ) (5.10 )
2018 25.50 -4.70
  1. Calculate the average rate of return for each stock during the period 2014 through 2018. Round your answers to two decimal places.

    Stock A:   %

    Stock B:   %

  2. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would the realized rate of return on the portfolio have been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign.
    Year Portfolio
    2014   %
    2015   %
    2016   %
    2017   %
    2018   %

    What would the average return on the portfolio have been during this period? Round your answer to two decimal places.

      %

  3. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places.
    Stock A Stock B Portfolio
    Standard Deviation % % %
  4. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places.
    Stock A Stock B Portfolio
    CV
  5. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio?

    -Select-Stock AStock BPortfolio

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