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The following information has been provided for 3 stocks over the period of 2022 to 2025: Ecpected return Year DD EE FF 2022 6%
The following information has been provided for 3 stocks over the period of 2022 to 2025: Ecpected return Year DD EE FF 2022 6% 10% 4% 2023 8% 8% 6% 2024 10% 6% 8% 12% 4% 10% 2025 By usign the above data, you have decided to consider three different investment alternatives: Alternative: 1 2 3 Reguirements: Investment: 100% of stock DD 50% of stock DD and 50% of stock EE 50% of stock DD and 50% of stock FF A) Calculate the average portfolio return for each of the three alternatives. (4 marks) B) Calculate the standard deviation of returns for each of the three alternatives. (6 marks) 6 C) On the basis of your findings in parts A and B, which of the three investment alternatives would you recommend? Why? (5 marks)
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