Historical Realized Rates of ReturnStocks A and B have the following historical returns:YearAB2012-17.00%-17.90%201321.5028.20201413.2527.502015-2.50-12.10201632.0021.55 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.YearPortfolio2012           %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. rArBPortfolioStd. Dev.   %   %        %

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Asked Sep 11, 2019
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Historical Realized Rates of Return

Stocks A and B have the following historical returns:

Year A B
2012 -17.00% -17.90%
2013 21.50 28.20
2014 13.25 27.50
2015 -2.50 -12.10
2016 32.00 21.55

 

  1. 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         %
  2. 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            %
  3. 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.    %    %         %
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Part 1 Average rate of rehwun uuill be caluulated by the division of sum of his tarical rehwens and the follous: number of years Calculahon uill be as f Atock A Average rate oratwn -17+ 21.50 +13.25+(-2.5)+32 ARR 5 9.45 f stock B Average rate of rutwn ARR -17.90 + 28.20 +21.50 + (-12.10)+21. 55 5 9.15 % Therefore, ARR of stock A is 9.45 % and ARR of tock B is q.45 /.

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fart 2 a portfelio includes 50lo of dtock A and 50% touk B, then ralized rate f rahun for each year will be calulated a follous (X .90) X .5 For yar 20I2 -17.45 For year 2013 21.50 X.5+ 28.20 x.5 24.85 13.25 X.527.50 x .5 For year 2DI 17 = 20. 37% (-2.5)X 0.5 (-12-10) X o. 5 -7.3 °l For year 2015 21.55 X 0.5 32 X 0.5 For year 2016 26.77/. 11

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Now, by using realized eturns average rat of portfolio uilN be calulated as fellows retwen on -17.45) 24.85 20.37 (-7.3) 26 77 ARR १.५5 /. Therefare, ARR on the portolio is 9.45%

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