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P8-14 Portfolio analysis You have been given the expected return data shown in the first table on three assets-F, G, and H-over the period 2016-2019.
P8-14 Portfolio analysis You have been given the expected return data shown in the first table on three assets-F, G, and H-over the period 2016-2019. Year 2016 2017 2018 2019 Asset F 16% 17 18 19 Expected return Asset G 17% 16 15 14 Asset H 14% 15 16 17 Using these assets, you have isolated the three investment alternatives shown in the following table. Alternative 1 2 3 Investment 100% of asset F 50% of asset F and 50% of asset G 50% of asset F and 50% of asset H N a. Calculate the expected return over the 4-year period for each of the three alternatives. b. Calculate the standard deviation of returns over the 4-year period for each of the three alternatives. c. Use your findings in parts a and b to calculate the coefficient of variation for each of the three alternatives. d. On the basis of your findings, which of the three investment alternatives do you recommend? Why
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