Years rA rB Portfolio return

2006 -18% -14.50% -16.25%

2007 33% 21.80% 27.40%

2008 15% 30.50% 22.75%

2009 -0.50% -7.60% -4.05%

2006 27% 26.30% 26.65%

Average rate of return on the portfolio = 11.30%

Co-efficient of variance = Standard deviation / Mean

Standard deviation of Stk A = 20.79%

Return of Stk A = 11.30%

Co-efficient of variance (A) = 1.84

Standard deviation of Stk B = 20.78%

Return of Stk B = 11.30%

Co-efficient of variance (B) = 1.84

Standard deviation of Port = 20.13%

Return of Portfolio = 11.30%

Co-efficient of variance Port = 1.78

Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio ? why ?

2006 -18% -14.50% -16.25%

2007 33% 21.80% 27.40%

2008 15% 30.50% 22.75%

2009 -0.50% -7.60% -4.05%

2006 27% 26.30% 26.65%

Average rate of return on the portfolio = 11.30%

Co-efficient of variance = Standard deviation / Mean

Standard deviation of Stk A = 20.79%

Return of Stk A = 11.30%

Co-efficient of variance (A) = 1.84

Standard deviation of Stk B = 20.78%

Return of Stk B = 11.30%

Co-efficient of variance (B) = 1.84

Standard deviation of Port = 20.13%

Return of Portfolio = 11.30%

Co-efficient of variance Port = 1.78

Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio ? why ?

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Question:

Stocks A and...