Question: You have been given the expected return data shown in the first table on three assetslong dash?F, ?G, and Hlong dashover the period? 2016-2019: Expected
You have been given the expected return data shown in the first table on three
assetslong dash?F,
?G, and
Hlong dashover
the period? 2016-2019:
| Expected Return |
| ||||||
| Year | Asset F | Asset G | Asset H | ||||
| 2016 | 12?% | 13?% | ??? | 10?% | ??? | ||
| 2017 | 13?% | 12?% | 11?% | ||||
| 2018 | 14?% | 11?% | 12?% | ||||
| 2019 | 15?% | 10?% | 13?% | ||||
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?
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