Question $3$

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

Alternative Investment

$2,50\%$ of asset A and $50\%$ of asset $B$

$3,70\%$ of asset A and $30\%$ of asset $B$

a$.$ Calculate the average return over the four years for each of the three alternatives.

b$.$ Calculate the standard deviation of returns over the four years for each of these alternatives.

C$.$ On the basis of your findings, which of the investment alternatives do you think performed better over this period if the covariance between two assets is $0\mathrm{.}0245?$ Why?