Question: 3. You have been given the expected return data shown in the first table on three assetsF, G, and Hover the period 2017-2020 Year Asset

3. You have been given the expected return data shown in the first table on three assetsF, G, and Hover the period 2017-2020

Year

Asset F

Asset G

Asset H

2017

11

12

15

2018

8

9

18

2019

5

21

21

2020

14

6

12

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

Alternative

Investment

1

100% of asset F

2

15% of asset F and 85% of asset G

3

50% of asset F and 50% of asset H

  1. Calculate the expected return over the 4-year period for each of the three alternative

  2. Calculate the standard deviation of returns over the 4-year period for each of the three alternatives.

  3. Use your findings in parts a and b to calculate the coefficient of variation for each of the three alternatives.

  4. On the basis of your findings, which of the three investment alternatives do you recommend? Why?

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