Week 1 Project

This assignment will be submitted to Turnitin®.

Instructions:

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:

• 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.

Submission Details:

• Submit your 3 to 4 page paper in a Microsoft Word document, using APA style.
• Name your document MBA5009_W1_LastName_FirstName.doc.