Stocks A and B have the following historical returns:
Year |
Stock A's Returns,
rA |
Stock B's Returns,
rB |
2014 |
(21.20 |
%) |
(12.80 |
%) |
2015 |
34.00 |
|
16.00 |
|
2016 |
12.50 |
|
34.30 |
|
2017 |
(1.75 |
) |
(14.20 |
) |
2018 |
27.50 |
|
27.75 |
|
- 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: %
- 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.
%
- 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 |
% |
% |
% |
- 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 |
|
|
|
- Assuming you are a risk-averse investor, would you prefer to
hold Stock A, Stock B, or the portfolio?