Refer to the table below. Assume En. Nazril held the portfolio consisting of 50% of Stock B and 50% of Stock V. Year Stock B's Return, rB | Stock V's Return, rV 2015 -18% -14.5% 2016 33% 21.8% 2017 15% 30.5% 2018 -0.50% -7.6% 2019 27% 26.3% i. What would be the average return on the portfolio for the period of 2015-2019. ii. Calculate the standard deviation for the portfolio.

Refer to the table below. Assume En. Nazril held the portfolio consisting of 50% of Stock B and 50% of Stock V. Year Stock B's Return, rB | Stock V's Return, rV 2015 -18% -14.5% 2016 33% 21.8% 2017 15% 30.5% 2018 -0.50% -7.6% 2019 27% 26.3% i. What would be the average return on the portfolio for the period of 2015-2019. ii. Calculate the standard deviation for the portfolio.

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

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Stock A and stock C have the following historical returns: Year Stock A Return Beta Stock C Return Beta 2017 (18%) 0.80 (14.50) 0.90 2018 33% 1.5 21.80% 2.0 2019 15% 2.0 30.50% 1.0 2020 (5.50%) -0.90 (7.60%) -0.50 2021 27% 1.0 26.30% 1.5 a. Calculate the average rate of return for each stock during the period 2017-2021 b. Assume you want to create a portfolio consisting of 60 percent of stock A and 40 percent of stock C, b.1. What would be your realized rate of return on the portfolio have been each year? b.2. What would be your average rate of return on the portfolio have been during this period? c. Calculate the standard deviation of the portfolio return d. Calculate the coefficient of variation for each stock and for the portfolio. e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? Why?
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rB 2016 (21.10 %) (14.70 %) 2017 23.50 28.50 2018 13.00 29.90 2019 (4.25 ) (10.40 ) 2020 27.75 5.60 Calculate the average rate of return for each stock during the period 2016 through 2020. 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 the realized rate of return on the portfolio have been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign. Year Portfolio 2016 % 2017 % 2018 % 2019 % 2020 % What would the average return on the portfolio have been during this period? Round your answer to two decimal places. % Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B…
Listed below are the annual rates of return earned on Stock X, Stock Yand Stock Z over the past 6 years.Year Stock X Stock Y Stock Z2014 20% 16% 0%2015 15% 17% -2%2016 -10% 15% 1%2017 30% 11% 0%2018 25% 5% 1%2019 14% -25% 1%As risk-adverse investor, what portfolio would you choose? Here are the options:Stock X only, Stock Y only, Stock Z only, a 50/50 split portfolio made of X & Y,or a 90/10 split portfolio made of X & Y. Show your calculations and support yourchoice.
Stocks A and B have the following historical returns:YearStock A's Returns, raStock B's Returns, ra2016(18.60%)(14.50%)201734.2520.40201814.7539.902019(1.00)(9.70)202026.7520.05a. Calculate the average rate of return for each stock during the period 2016 through 2020. Round your answers to two decimal places.Stock A:11.23%Stock B:11.23%b. 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 been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign.YearPortfolio2016-16.55%201727.33201827.33%2019-5.35202023.40What would the average return on the portfolio have been during this period? Round your answer to two decimal places.11.23c. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places.Stock AStock BPortfolioStandard Deviationd. Calculate the coefficient of variation for each…
Stocks A and B have the following historical returns: Year Stock A’s Returns, rA Stock B’s Returns, rB2013 (24.25%) 5.50%2014 18.50 26.732015 38.67 48.252016 14.33 (4.50)2017 39.13 43.86 a. Calculate the average rate of return for each stock during the period 2013 through2017. Assume that someone held a portfolio consisting of 50% of Stock A and 50% ofStock B. What would the realized rate of return on the portfolio have been in each yearfrom 2013 through 2017? What would the average return on the portfolio have beenduring that period?b. Calculate the standard deviation of returns for each stock and for the portfolio. c. Assume the risk-free rate during this time was 3.5%. What are the Sharpe ratios forStocks A and B and the portfolio over this time period using their average returns?d. Looking at…
You are given the following information regarding four stocks in a portfolio: Company # of Shares Price ($) 2020 Price ($) 2021 ELITE 40,000 3.11 2.99 FTNA 5,000 30.37 34.10 GWEST 55,000 2.05 1.80 TTECH 20,000 5.55 4.60 Assuming 2020 is the base year with an index value of 500: i. Compute a price-weighted index of these four stocks for 2021. ii. Compute a value-weighted index of these four stocks for 2021. What is the percentage change in the value of the index from 2020 to 2021? iii. Compute the un-weighted index of these four stocks for 2019. What is the percentage change in the value of the index from 2020 to 2021
You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year rA rB 2014 -20.00% -5.00% 2016 42.00 15.00 2017 20.00 -13.00 2018 -8.00 50.00 2019 25.00 12.00 a. Calculate the average rate of return for each stock during the 5-year period. b. Suppose you had 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? c. Calculate the standard deviation of returns for each stock and for the portfolio. d. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A, Stock B, or the portfolio? Why?
You are considering an investment in either individual stocks or a portfolio of stocks. The two stocks you are researching, Stock A and Stock B, have the following historical returns: Year r ̄A r ̄B 2014 -20.00% -5.00% 2016 42.00 15.00 2017 20.00 -13.00 2018 -8.00 50.00 2019 25.00 12.00 Calculate the average rate of return for each stock during the 5-year period. Suppose you had 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? Calculate the standard deviation of returns for each stock and for the portfolio. Suppose you are a risk-averse investor. Assuming Stocks A and B are your only choices, would you prefer to hold Stock A, Stock B,…
Stocks A and B have the following historical returns: Year Stock A's Returns, rA Stock B's Returns, rA 2014 (19.00 (14.70 %) 2015 34.75 19.50 2016 13.75 30.90 2017 (4.25 (9.30 ) 2018 34.25 33.10 Calculate the average rate of return for each stock during the period 2014 through 2018. 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 the realized rate of return on the portfolio have been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign. Year Portfolio 2014 % 2015 % 2016 % 2017 % 2018 % What would the average return on the portfolio have been during this period? Round your answer to two decimal places. % Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock A Stock B Portfolio…
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The table below shows the historical rates of return (including dividends) for two stocks: Year, Stock A, Stock B 2022, 3%, -3% 2021, 12%, 23% 2020, 8%, 20% 2019, 4%, -12% Stock A makes up 40% of the value of portfolio, and stock B makes up the rest. Calculate the portfolio return for each year. What was the portfolio return in 2022? What was the portfolio return in 2021? What was the average annual portfolio return over all years? What was the standard deviation of annual portfolio returns?
Stocks A and B have the following historical returns: Year Stock A’s Returns, rA Stock B’s Returns, rB 2010 (18.00%) (14.50%) 2011 33.00 21.80 2012 15.00 30.50 2013 (0.50) (7.60) 2014 27.00 26.30 Calculate the average rate of return for each stock during the period 2010 through 2014. 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 been 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 a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? Explain thoroughly why.

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