Question

# Portfolio analysis???You have been given the expected return data shown in the first table on three...

Portfolio analysis???You have been given the expected return data shown in the first table on three

assetslong dash—?F,?G, and H long dash—over the period? 2016-2019:

 Expected Return Year Asset F Asset G Asset H 2016 15?% 16?% ??? 13?% ??? 2017 16?% 15?% 14?% 2018 17?% 14?% 15?% 2019 18?% 13?% 16?%

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

a.??Calculate the expected return over the? 4-year period for each of the three alternatives.

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?

 Year Asset F G H 2016 15 16 13 2017 16 15 14 2018 17 14 15 2019 18 13 16 Average return = using average function in MS excel 16.5 14.5 14.5 standard deviation= using stdevp function in ms excel 1.118034 1.118034 1.118034 coefficient of variance = standard deviation/mean 6.78% 7.71% 7.71% return risk Investment 1 16.50% 6.78% Investment 2 (.5*.165)+(.5*.145) 15.5% (.5*.678)+(.5*.771%) 34% Investment 3 (.5*.165)+(.5*.145) 15.5% (.5*.678)+(.5*.771%) 34% Investment in alternative 1 is better as return is high and risk is low

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