Question

3. You have been given the expected return data shown in the first table on three assets—F, G, and H—over the period 2016-2019

Year	Asset F	Asset G	Asset H
2016	7	10	15
2017	6	8	16
2018	3	19	19
2019	11	9	11

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

Alternative	Investment
1	100% of asset F
2	75% of asset F and 25% of asset G
3	50% of asset F and 50% of asset H

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?

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Answer 1

Answer:

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