Portfolio analysis You have been given the expected return data shown in the first table on three assetsF, G, and Hover the period 2016-2019.

EXPECTED RETURN

YEAR ASSET F ASSET G ASSET H

2016 16% 17% 14%

2017 17% 16% 15%

2018 18% 15% 16%

2019 19% 14% 17%

ALTERNATIVE 1INVESTMENT 100% OF F

ALTERNATIVE 2 50% OF ASSET F AND 50% OF ASSET G

ALTERNATIVE 3 50% OF F AND 50% OF 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?