(b) Stocks for Fumbeshi and Mundashi have the following historical returns: Year Fumbeshi Mundashi 2010 -18% -14.5% 2011 33% 21.8% 2012 15% 30.5% 2013 -0.5% -7.6% 2015 27% 26.3% (i) What is the average return rate of return for each stock during the period 2010 through 2015? ( (ii) Assuming someone held a portfolio consisting of 50 percent of stocks Fumbeshi and 50 percent stocks of Mundashi, what would have been the realized return on the portfolio during this period? (iii) What is the standard deviation of each stock during the period 2010 through 2015?
(b) Stocks for Fumbeshi and Mundashi have the following historical returns: Year Fumbeshi Mundashi 2010 -18% -14.5% 2011 33% 21.8% 2012 15% 30.5% 2013 -0.5% -7.6% 2015 27% 26.3% (i) What is the average return rate of return for each stock during the period 2010 through 2015? ( (ii) Assuming someone held a portfolio consisting of 50 percent of stocks Fumbeshi and 50 percent stocks of Mundashi, what would have been the realized return on the portfolio during this period? (iii) What is the standard deviation of each stock during the period 2010 through 2015?
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 1P
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100%
(b) Stocks for Fumbeshi and Mundashi have the following historical returns:
Year |
Fumbeshi |
Mundashi |
2010 |
-18% |
-14.5% |
2011 |
33% |
21.8% |
2012 |
15% |
30.5% |
2013 |
-0.5% |
-7.6% |
2015 |
27% |
26.3% |
(i) What is the average return
(ii) Assuming someone held a portfolio consisting of 50 percent of stocks Fumbeshi and 50 percent stocks of Mundashi, what would have been the realized return on the portfolio during this period?
(iii) What is the standard deviation of each stock during the period 2010 through 2015?
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