Using these assets, you have isolated the three investment alternatives shown in the following

table.

a$.$ Calculate the expected return over the $4-$year period for each of the three alternative

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?

Asset $Z$ has an expected return of $9\mathrm{.}5$ percent and a beta of $0\mathrm{.}85.$ If the risk$-$free rate is $2\mathrm{.}2$

percent, complete the following table for portfolios of Asset W and a risk$-$free asset.

Illustrate the relationship between portfolio expected return and portfolio beta by plotting

the expected returns against the betas. What is the slope of the line that results?