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5) You have been given the following return data on three assets- A, B and C- over the period 2016-2020. Year 2016 2017 2018 2019
5) You have been given the following return data on three assets- A, B and C- over the period 2016-2020. Year 2016 2017 2018 2019 2020 Expected Return Asset A Asset B Asset C 15 21 18 14 24 17 20 20 14 18 12 15 16 10 16 Using these assets, you have isolated three investment alternatives. Page 1 of 2 Alternative 1 2 Investment 50% in asset A and 50% in asset B 50% in asset B and 50% in asset C a) Calculate the expected return over the five-year period for each of the two alternatives. b) Calculate the standard deviation of returns over the five-year period for each of the two alternatives. c) Calculate the coefficient of variation for each of the two alternatives. d) Which of the two investment alternatives would you recommend? Why? 4
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