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QUESTION

# REAIJ- RATES OF RETURN Stocks A and B have the folluwrg historical returns: Yuar Stack A's Stack B's Itetums, 11 llaletlrrns.r r]; 201 '| {13.01195}...

- Calculate the average rate of return for each stock during the period 2011 through 2015.
- 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 ben each year? What would
- the average return on the portfolio have been during this period?
- Calculate the standard deviation of returns for each stock and for the portfolio.
- Calculate the coefficient of variation for each stock and for the portfolio.
- Assuming you are risk-averse investor, would you prefer to hold stock A , stock B, or the
- portfolio? Why?