Question: Please help with part C, D, and E. Thank you! Stocks A and B have the following historical returns: Stock B's Returns, le (13.40%) Year
Please help with part C, D, and E. Thank you!
Stocks A and B have the following historical returns: Stock B's Returns, le (13.40%) Year Stock A's Returns, A 2014 (21.50%) 2015 39.75 2016 11.25 2017 (1.00) 2018 26.25 a. Calculate the average rate of return for each stock during the period 2014 through 2018. Round your answers to two decimal places. Stock A: 10.95 % Stock B: 10.95 % 26.30 25.80 (13.30) 29.35 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 2014 % 2015 2016 2017 Portfolio -17.45 33.03 18.53 -2.15 27.8 % % 2018 % What would the average return on the portfolio have been during this period? Round your answer to two decimal places. 10.95 % C. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock Portfolio Standard Deviation 33.46 % 33.02 % 73.82 % d. 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 3.06 3.02 6.74 e. Assuming you are a risk-averse investor, would you prefer to hold 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
