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   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.    %    %         %

Question

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.    %    %         %

Expert Answer

Want to see the step-by-step answer?

See Answer

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

See Answer
*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Carrie loaned her friend $4500 to buy a used car. She had her friend sign a note with repayment term...

A: A non-business debt means the debt which relates to either debts given personally or for investment ...

Q: I initially did this using a differential analysis, but it seems like the project wants me to do it ...

A: In order to take a decision, incremental revenue and costs need to be analysed. When incremental rev...

Q: CVP Analysis; Commissions; Ethics Lionel Corporation manufactures pharmaceutical products sold throu...

A: Note: Since we are entitled to answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit t...

Q: Reyes Manufacturing Company uses a job order cost system. At the beginning of January, the company h...

A: Step 1:T Accounts are prepared with the help of journal entries passed. Journal entries are written ...

Q: How do I find what the net increase or decrease is in cash on a Statement of Cash Flow?

A: Add the net cash flows from all three activities of statement of cash flows (i.e. operating activiti...

Q: looking for the net income of the year

A: Computation of Net Income

Q: On January 1, 2019, Bailey Industries had shares outstanding as follows. 6% cumulative preference sh...

A: Click to see the answer

Q: P 17-4 Installment liquidation The partnership of Gil, Hal, Ian, and Joe is preparing to liquidate. ...

A: Liquidation is a process where the company accounts are closed by selling off the assets of company,...

Q: Cost flow assumptions-FIFO AND LIFO using a periodic system  the beginning inventory was 600 units a...

A: FIFO or the First In First Out is the inventory valuation method in which the oldest inventory is di...