Question
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
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 2013-2016. Expected return Asset F 2016 16%, 2017 17% 2018 18% 2019 19%- Asset G 2016 17% 2017 16% 2018 15% 2019 14% - Asset H 2016 14% 2017 15% 2018 16% 2019 17% Using these assets, you have isolated the three investment alternatives shown in the following table.
Alternative investments 1- 100% of asset F
Alternative 2 50% of asset F and 50% of asset G
Alternative 3 50% of asset F and 50% of asset H
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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