Stocks A and B have the following historical returns: a. Calculate the average rate of return for each stock during the period 2016 through 2020. Round your answers to two decimal places. Stock A: % % Year 2016 2017 2018 2019 2020 Stock B: 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. Stock A's Returns, ra (20.60%) 39.75 17.25 (3.50) 25.00 CV Stock A % Stock A Stock B's Returns, B (14.30%) 29.80 37.30 (6.60) 11.70 Year 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. Portfolio % c. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock B % % Portfolio % % % % % Standard Deviation d. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. Stock B Portfolio e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? -Select-

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Question
Stocks A and B have the following historical returns:
Year
2016
2017
2018
2019
2020
a. 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 A's Returns, ra
(20.60%)
39.75
17.25
(3.50)
25.00
Stock B:
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.
CV
Stock A
Stock B's Returns, B
(14.30%)
29.80
37.30
(6.60)
11.70
Year
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.
Portfolio
%
c. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places.
Stock B
%
Portfolio
%
Stock A
%
Standard Deviation
d. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places.
Stock B
Portfolio
%
%
%
%
%
e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio?
-Select-
A.
Transcribed Image Text:Stocks A and B have the following historical returns: Year 2016 2017 2018 2019 2020 a. 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 A's Returns, ra (20.60%) 39.75 17.25 (3.50) 25.00 Stock B: 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. CV Stock A Stock B's Returns, B (14.30%) 29.80 37.30 (6.60) 11.70 Year 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. Portfolio % c. Calculate the standard deviation of returns for each stock and for the portfolio. Round your answers to two decimal places. Stock B % Portfolio % Stock A % Standard Deviation d. Calculate the coefficient of variation for each stock and for the portfolio. Round your answers to two decimal places. Stock B Portfolio % % % % % e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? -Select- A.
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