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 TA TB 2017 -17.00% -8.00% 2018 34.00 14.00 2019 29.00 -18.00 2020 -5.00 55.00 2021 21.00 19.00 a. Calculate the average rate of return for each stock during the 5-year period. Do not round intermediate calculations. Round your answers to two decimal places. Stock A: % Stock B: % 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? Do not round intermediate calculations. Round your answers to two decimal places. Negative values, if any, should be indicated by a minus sign.

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 13P
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Year
Portfolio
2017
%
2018
%
2019
%
2020
%
2021
%
Average return
%
c. Calculate the standard deviation of returns for each stock and for the portfolio. Do not round intermediate
calculations. Round your answers to two decimal places.
TA
TB
Portfolio
Std. Dev.
%
%
Transcribed Image Text:Year Portfolio 2017 % 2018 % 2019 % 2020 % 2021 % Average return % c. Calculate the standard deviation of returns for each stock and for the portfolio. Do not round intermediate calculations. Round your answers to two decimal places. TA TB Portfolio Std. Dev. % %
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
FA
IB
2017
-17.00%
-8.00%
2018
34.00
14.00
2019
29.00
-18.00
2020
-5.00
55.00
2021
21.00
19.00
a. Calculate the average rate of return for each stock during the 5-year period. Do not round intermediate
calculations. Round your answers to two decimal places.
Stock A:
%
Stock B:
%
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? Do not round intermediate calculations. Round your answers to two
decimal places. Negative values, if any, should be indicated by a minus sign.
Transcribed Image Text: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 FA IB 2017 -17.00% -8.00% 2018 34.00 14.00 2019 29.00 -18.00 2020 -5.00 55.00 2021 21.00 19.00 a. Calculate the average rate of return for each stock during the 5-year period. Do not round intermediate calculations. Round your answers to two decimal places. Stock A: % Stock B: % 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? Do not round intermediate calculations. Round your answers to two decimal places. Negative values, if any, should be indicated by a minus sign.
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the standard deviation for part c are all wrong. could you please check it again?

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