Question: You have been given the expected return data shown in the first table on three assetsF, G, and Hover the period 2016-2019 Year Asset F

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

Year

Asset F

Asset G

Asset H

2016

7

10

15

2017

6

8

16

2018

3

19

19

2019

11

9

11

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

Alternative

Investment

1

100% of asset F

2

75% of asset F and 25% 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 alternative

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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