Consider the following information for two stocks. Assume that portfolio XY is 5
ID: 2736704 • Letter: C
Question
Consider the following information for two stocks. Assume that portfolio XY is 50% invested in stock X and 50% in stock Y.
Year Stock X Stock Y Portfolio XY
2010 11% 21%
2011 37% (38) %
2012 (21) % 48%
2013 26% 16%
2014 13% 24%
Find the portfolio average return and standard deviation.
A.
11.86% and 9.34%
B.
12.35% and 11.34%
C.
12.35% and 14.23%
D.
13.70% and 17.45%
E.
13.70% and 8.42%
A.
11.86% and 9.34%
B.
12.35% and 11.34%
C.
12.35% and 14.23%
D.
13.70% and 17.45%
E.
13.70% and 8.42%
Explanation / Answer
Formulas used average for each year=50%*return of A+50%*return of B
Total average=average of yearly returns
Standard deviation we used excel formula as =STDEVA(numbers)
Year X Y XY 2010 11% 21% 16.00% 2011 37% -38% -0.50% 2012 -21% 48% 13.50% 2013 26% 16% 21.00% 2014 13% 24% 18.50% Average 13.70% Standard Deviation 8.42%Related Questions
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