FINANCE 550-The Allied Group has acquired Kramer Industries
Question # 00488617
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Updated on: 02/22/2017 05:01 AM Due on: 02/22/2017
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% |
Questions: Address all of the following questions in a brief but thorough manner.
- What was the average return for the stock over the period of 1990 through 2010?
- What was the standard deviation for the stock over this period?
- 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?
- Should Allied invest in the stock? Justify your response.
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Rating:
/5
Solution: FINANCE 550-The Allied Group has acquired Kramer Industries