A us investor is considering two stocks and wishes to, Ask an Expert

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A U.S. investor is considering two stocks and wishes to select one of them for his portfolio. Data on these stocks follow. Assume that the U.S. risk-free rate is 6 percent.

Stock Country Average Return Past 5 Years Standard Deviation

A United States 12% 30%

B Poland, listed as ADR 14% 50%

A. Calculate the Sharpe index for each stock.

B. Which stock would you prefer for your portfolio? Explain

C. Would you five special considerations to B because it is a foreign stock? Explain

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91782853

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