Question
The following information indicates percentage returns for stocks L and M over a 6-year period: Year Stock L Returns Stock M Returns 1 14.02% 20.19%
The following information indicates percentage returns for stocks L and M over a 6-year period:
Year | Stock L Returns | Stock M Returns |
1 | 14.02% | 20.19% |
2 | 14.59% | 18.23% |
3 | 16.99% | 16.41% |
4 | 17.29% | 14.41% |
5 | 17.5% | 12.43% |
6 | 19.27% | 10.41% |
In combining [LM] in a single portfolio, stock M would receive 60% of capital funds.
Furthermore, the information below reflects percentage returns for assets F, G, and H over a 4-year period, with asset F being the base instrument:
Year | Asset F Returns | Asset G Returns | Asset H Returns |
1 | 16.17% | 17.06% | 14.39% |
2 | 17.24% | 16.44% | 15.3% |
3 | 18.44% | 15.34% | 16.48% |
4 | 19.23% | 14.13% | 17.42% |
Using these assets, you have a choice of either combining [FG] or [FH] in a single portfolio, on an equally-weighted basis.
Required: Calculate the absolute percentage difference in the coefficient of variation (CV) between the stock portfolio [LM] and the portfolio which outlines the optimal combination of assets.
Answer% Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).
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