Question: Hello I need help with my homework Assignment 2: Individual Course Project The Allied Group has acquired Kramer Industries and is now considering additional investments.

Hello I need help with my homework

Assignment 2: Individual Course Project

The Allied Group has acquired Kramer Industries and is now considering additional investments. They have determined that there is a firm that is a good fit for their portfolio, the Kramer firm of Montana. The firm was established in 1990 and has the following historical returns:

Kramer Industries
Year Earnings

1990

(8% Loss)

1995

23%

2000

26%

2005

31%

2010

18%

Questions: Address all of the following questions in a brief but thorough manner.

  • What was the average return for the stock over the period of 1990 through 2010?
  • What was the standard deviation for the stock over this period?
  • Assume that you currently have a portfolio that returns 19.5%. If you add this stock to the current portfolio, what would happen to the average return on the portfolio?
  • Should Allied invest in the stock? Justify your response

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