Question

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

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

Expected Return
Year	Asset F		Asset G		Asset H
2016	18%		19%	???	16%	???
2017	19?%		18%		17%
2018	20?%		17%		18?%
2019	21%		16%		19%

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?

Answer 1