+1-415-670-9189
info@expertsmind.com
Calculate the average rate of return
Course:- Finance Basics
Reference No.:- EM1360805




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Finance Basics

Realized rates of return

Stocks A and B have the following historical returns:
Year Stock A's Returns, rA Stock B's Returns, rB
2001 (18.00%) (14.50%)
2002 33.00 21.80
2003 15.00 30.50
2004 (0.50) (7.60)
2005 27.00 26.30

a. Calculate the average rate of return for each stock during the period 2001 through 2005.

b. Assume that someone held a portfolio consisting of 50 percent of Stock A and 50 percent of Stock B. What would the realized rate of return on the portfolio have been in each year? What would the average return on the portfolio have been during this period?

c. Calculate the standard deviation of returns for each stock and for the portfolio.

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?

 




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
How long will it take for Bill to recoup his initial investment in project A? How long will it take for Bill to recoup his initial investment in project B? Using the payback p
The firm's marginal tax rate is 38%. The entire cost of the system was financed with proceeds from the sale of nine-year BB-rated corporate bonds with a $1000 par value and
All purchases and sales are on credit. There has been no change in the level of receivables or payables over the period. Calculate the length of the OCC for the business and g
Determine a portfolio of the 0.5- and 1-year zeroes that has the same payoff as the claim at time 0.5.What is the value of the claim today in the absence of arbitrage? What
Risk and Rates of return, Can you show me the working out of this problem. I know you have to find the weight of each stock but i do not understand how to solve for it with th
Sociologists explain deviance by three (3) major perspectives: biological, functional conflict, and symbolic interaction. Identify your role, for example, as a parent and wh
ABC Company has annual sales of $628,885. The cost of goods sold are $432,208. The firm has an accounts receivable balance of $15,425 and an accounts payable balance of $31,
Calculate the flexed budget and the key variances between budgeted and actual results. Reconcile the original budget and present the relationship between the budgeted and the