Assignment: Average Return of Stocks
Length: 3 to 4 pages.
The Allied Group has acquired Kramer Industries and is now considering additional investments. They have determined that there is a firm that is a good fit for their portfolio, the Kramer firm of Montana. The firm was established in 1990 and has the following historical returns:
|
Kramer Industries
|
|
Year
|
Earnings
|
|
1990
|
(8% Loss)
|
|
1995
|
23%
|
|
2000
|
26%
|
|
2005
|
31%
|
|
2010
|
18%
|
Address all of the following questions:
A. What was the average return for the stock over the period of 1990 through 2010?
B. What was the standard deviation for the stock over this period?
C. Assume that you currently have a portfolio that returns 19.5%. If you add this stock to the current portfolio, what would happen to the average return on the portfolio?
D. Should Allied invest in the stock? Justify your response.
Format your assignment according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the assignment, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.