View the step-by-step solution to: Years rA rB Portfolio

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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 ?

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Dear Student Please find... View the full answer


If you want the formulas and any calculations, select the corresponding cell and press F2(Function Key on key board),
It will show all calculations and formulas Automatically
Stocks A and...

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