YEAR2005STOCK “A" RETURNS(10%)STOCK “B" RTEURNS(3%)21.29%200618.5%200738.67%44.25%2008200914.33%13.67%33.00%28.30%(i) Calculate the average rate of return for each stock during the period 2005-2009.(ii) You hold a portfolio of 50% A and 50% B. What is the rate of return for each vearbetween 2005 and 2009?(iii) What would have been the average return for the portfolio for the period 2005-2009?

Average rate of return of a stock represent the rate of return that is earned by the stockholder for…

STOCK “A" RETURNS (10%) 18.5% 38.67% 14.33% 33.00% STOCK “B" RTEURNS (3%) 21.29% YEAR 2005 2006 2007 2008 2009 44.25% 13.67% 28.30% Calculate the average rate of return for each stock during the period 2005-2009. (i) (ii) You hold a portfolio of 50% A and 50% B. What is the rate of return for each vear between 2005 and 2009? (iii) What would have been the average return for the portfolio for the period 2005-2009?

STOCK “A" RETURNS (10%) 18.5% 38.67% 14.33% 33.00% STOCK “B" RTEURNS (3%) 21.29% YEAR 2005 2006 2007 2008 2009 44.25% 13.67% 28.30% Calculate the average rate of return for each stock during the period 2005-2009. (i) (ii) You hold a portfolio of 50% A and 50% B. What is the rate of return for each vear between 2005 and 2009? (iii) What would have been the average return for the portfolio for the period 2005-2009?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter8: Risk And Rates Of Return

Section: Chapter Questions

Problem 8PROB

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