Hellow
please assist with a solution to this question:
Question1Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Your company hasdecided to investment in the stock market. Management has taskedyou to conduct and assessment of the two stocks listed below.
Year | Stock ArA | Stock BrB |
2014 | (18.00%) | (14.50%) |
2015 | 33.00 | 21.80 |
2016 | 15.00 | 30.50 |
2017 | (0.50) | (7.60) |
2018 | 27.00 | 26.30 |
Required:
- Calculate the average rate of return for each stock during theperiod 2014 through2018.                                                                                                                            Â
- Assume that someone held a portfolio consisting of 50% of StockA and 50% of Stock B. What would the realised rate of return on theportfolio have been each year? What would the average return on theportfolio have been during thisperiod?                                                                                                                                     Â
- Calculate the standard deviation of returns for each stock andfor the portfolio
- Calculate the coefficient of variation for each stock and fortheportfolio.        Â
- Assuming you are a risk-averse investor, would you prefer tohold Stock A, Stock B, or the portfolio?Why?                                                                                               Â
