What would the average return on the portfolio have been during this period? Rou

Question

What would the average return on the portfolio have been during this period? Round your answer to two decimal places. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? Realized rates of return Stocks A and B have the following historical returns: Calculate the average rate of return for stock A during the period 2006 through 2010. Round your answer to two decimal places. Calculate the average rate of return for stock B during the period 2006 through 2010. Round your answer to two decimal places. 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 in each year? Round your answers to two decimal places.

Explanation / Answer

a. Average return of stock A= 10.72% Average return of stock B= 10.72% b. 2006= -17.4% 2007= 28.75% 2008= -7.1% 2009= 24.575% averege return of portfolio= 10.72% c. SD of A= 20.388% DS of B= 21.736% SD of portifolio=19.35% d. coeff of variation= SD/meanx100 A= 190.186% B= 197.51% Portfolio= 180.50%

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