Year 2003 Stock A Returns, rA 2004 (18.00%) 2005 2006 13.00 30.50 2007. 10.50) 27.00 26.30 Calculate the average rate of retum for each stock during the S-year period
DAssume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B What would have been the realized rate ofreturn on the portfolio in each year? What would have been the average return on the portfolio during this pertoo?
CCalculate the standard deviation of retums for each stock and for the portfolto.
DCalculate the coctricient of vanation for each stock and for the porttolto.
EIl you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the porttolio?
Why?
- If you decide to change the percentage owned in each stock, like 60% in Stock A, and 40% in stock B for example, or any other combinations or than 50-50, will your answer in part (e) above change? Why?
DAssume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B What would have been the realized rate ofreturn on the portfolio in each year? What would have been the average return on the portfolio during this pertoo?
CCalculate the standard deviation of retums for each stock and for the portfolto.
DCalculate the coctricient of vanation for each stock and for the porttolto.
EIl you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the porttolio?
