Stocks A and B have the following historical returns: Year PA 2009 -17.30% -15.10% 2010 36.75 24.70 2011 18.50 38.60 2012 -2.25 -7.20 2013 31.75 28.45 Calculate the average rate of return for each stock during the past 5-year period of time.

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
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Stocks A and B have the following historical
returns:
Year
TA
2009
-17.30%
-15.10%
2010
38.75
24.70
2011
18.50
38,60
2012
-2.25
-7.20
2013
31.75
28.45
Calculate the average rate of return for each
stock during the past 5-year period of time.
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?
2009:
2010:
2011:
2012:
2013:
Average return:
Calculate the standard deviation of returns for
each stock and the portfolio
Stock A std dev:
Stock B std dev:
Portfolio std dev:
Transcribed Image Text:Stocks A and B have the following historical returns: Year TA 2009 -17.30% -15.10% 2010 38.75 24.70 2011 18.50 38,60 2012 -2.25 -7.20 2013 31.75 28.45 Calculate the average rate of return for each stock during the past 5-year period of time. 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? 2009: 2010: 2011: 2012: 2013: Average return: Calculate the standard deviation of returns for each stock and the portfolio Stock A std dev: Stock B std dev: Portfolio std dev:
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