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You have been given the expected return data shown in the first table on three assetsF, G, and Hover the period 2014-2017 Expected Return Year
You have been given the expected return data shown in the first table on three assetsF, G, and Hover the period 2014-2017 | |||
Expected Return | |||
Year | Asset F | Asset G | Asset H |
2014 | 18% | 12% | 14% |
2015 | 14% | 16% | 15% |
2016 | 22% | 8% | 16% |
2017 | 13% | 17% | 17% |
Using these assets, you have isolated the three investment alternatives shown in the following table. | |||
Alternative | Investment | ||
1 | 100% of asset F | ||
2 | 50% of asset F and 50% of asset G | ||
3 | 50% of asset F and 50% of asset H | ||
Answer the following: a) What is the expected return over the 4-year period for each of the three alternative b) What is the standard deviation of returns over the 4-year period for each of the three alternatives. c) What is the coefficient of variation for each of the three alternatives d) Which investment alternative do you recommend? Why? Show all calculations in Excel |
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