Stocks M and W have the following historical returns:
Year Stock M Stock W
2007 -19% -12.50%
2008 35% 22.75%
2009 15% 34.50%
2010 -1.70% -7.15%
2011 27% 23.30%
a. Compute the average rate of return for each stock during the 5-year period.
b. Suppose that you're planning to hold portfolio consisting of 45% of Stock M and 55% of Stock W. Determine the realized rate of return on portfolio in each year?
c. Compute the average return on the portfolio for the 5 year period?
d. Compute the standard deviation of returns for each stock and for the portfolio?
e. Compute the coefficient of variation for each stock and for the portfolio?