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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