You have been asked for your advice in selecting a portfolio of assets and have given the
following data:

Year Expected Return
Asset A Asset B Asset C
2016 16% 18% 20%
2017 18 14 14
2018 20 16 22

You have been told that you can create two portfolios – one considering of assets A and
B (investing proportion 60% and 40%) and the other consisting of assets A and C
(investing proportion 30% and 70%).
Requirements:
i. What is the expected return for each asset over the 3-year period?
ii. What is the standard deviation for each asset’s return?
iii. What is the expected return for each of the two portfolios?
iv. What is the standard deviation for each portfolio?
v. What is the coefficient of variance for each portfolio?
vi. Which portfolio do you recommend? why?