Question: can someone answer this asap? please explain and solve. 16-3 Stock A and Stock B have the following historical returns: Year Stock A 2004 -18.0%
16-3 Stock A and Stock B have the following historical returns: Year Stock A 2004 -18.0% 33.0% 2006 15.0% 2007 -0.5% 2008 27.0% 2005 Stock B 14.5% -21.8% 29.5% 7.6% 26.3% a. Calculate the average rate of return for each stock during this period. Sum of all the individual year returnsumber of years= average rate of return=Stock A=11.30% B=11.22% b. Assume that someone held a portfolio consisting of 50 percent Stock A and 50 percent Stock B. What would have been the realized rate of return on the portfolio for each year? What would have the realized rate of return been over the period? c. Using a spread sheet, calculate the standard deviation (0) for each stock and the portfolio. d. Calculate the coefficient of variation for each stock and the portfolio. e. If you are a risk averse investor, would you prefer Stock A, Stock B or the portfolio
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
