Question

You have been given the following return​ data, three assets ​A,​B, and C over the period 2021-2024

    Expected Return      
Year   Asset A   Asset B   Asset C
2021   8%             11%         5%
2022   10%            9% 7%
2023   12%            7%          9%
2024   14%            5%         11%

Using these​ assets, you have isolated three investment​ alternatives:

Alternative   Investment          
1   100%   of asset A      
2   45%   of asset A and   55%   of asset B
3   45%   of asset A and   55%   of asset C

a. Calculate the average portfolio return for each of the three alternatives.

b. Calculate the standard deviation of returns for each of the three alternatives.

c. On the basis of your findings in parts a and b​, which of the three investment alternatives would you​ recommend? Why?

Answer 1

Results:

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