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4.1.2 You have been given the return data shown in the first table on three assets-A, B, and C-over the period 2018-2021. Expected return Year
4.1.2 You have been given the return data shown in the first table on three assets-A, B, and C-over the period 2018-2021. Expected return Year Asset A Asset B Asset C 2018 14% 17% 16% 2019 15 16 17 2020 16 15 18 2021 17 14 19 1 Using these assets, you have isolated the four investment alternatives shown in the following table: Alternative Investment 100% of asset A 2 100% of asset C 3 40% of asset A and 60% of asset B 4 40% of asset A and 60% of asset C a. Calculate the expected return over the 4-year period for each of the four alternatives. b. Calculate the standard deviation of returns over the 4-year period for each of the four alternatives. c. Use your findings in parts a and b to calculate the coefficient of variation for each of the four alternatives. d. On the basis of your findings, which of the four investment alternatives do you recommend? Why
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