Historical Realized Rates of Return Stocks A and B have the following historical returns: Year 2012 -15.10% -14.90% 2013 21.50 27.00 2014 12.50 31.60 2015 -4.00 -6.10 2016 29.25 6.55 Calculate the average rate of return for each stock during the 5-year period. Round your answers to two decimal places. Stock A % Stock B % Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Round your answers to two decimal places. Year Portfolio 2012 % 2013 % 2014 % 2015 % 2016 % Average return % Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. rA rB Portfolio Std. Dev. % % % If you are a risk-averse investor then, assuming these are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? -Select-Stock AStock BPortfolio
Historical Realized Rates of Return Stocks A and B have the following historical returns: Year 2012 -15.10% -14.90% 2013 21.50 27.00 2014 12.50 31.60 2015 -4.00 -6.10 2016 29.25 6.55 Calculate the average rate of return for each stock during the 5-year period. Round your answers to two decimal places. Stock A % Stock B % Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Round your answers to two decimal places. Year Portfolio 2012 % 2013 % 2014 % 2015 % 2016 % Average return % Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. rA rB Portfolio Std. Dev. % % % If you are a risk-averse investor then, assuming these are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? -Select-Stock AStock BPortfolio
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Historical Realized
Stocks A and B have the following historical returns:
| Year | ||
| 2012 | -15.10% | -14.90% |
| 2013 | 21.50 | 27.00 |
| 2014 | 12.50 | 31.60 |
| 2015 | -4.00 | -6.10 |
| 2016 | 29.25 | 6.55 |
- Calculate the average rate of return for each stock during the 5-year period. Round your answers to two decimal places.
Stock A % Stock B % - Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock B. What would have been the realized rate of return on the portfolio in each year? What would have been the average return on the portfolio during this period? Round your answers to two decimal places.
Year Portfolio 2012 % 2013 % 2014 % 2015 % 2016 % Average return % - Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places.
rA rB Portfolio Std. Dev. % % % - If you are a risk-averse investor then, assuming these are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio?
-Select-Stock AStock BPortfolio
Please answer number 2,3,and 4
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education