The expected return data

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You have been given the expected return data shown in the first table on 3 assets- F, G and H over the period 2016-2019.

                                        F         G         H

2016                             13%     14%     11%

2017                             14%      13%    12%

2018                             15%      12%     13%

2019                              16%     11%      14%

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

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 alternatives.

b. Calculate the standard deviation of returns over the four year period for each of the alternatives.

c. Use your findings in parts a and b to calculate the coefficient of variation for each of the 3 alternatives.

d. On the basis of your findings which of the three investment alternatives do you recommend and why?

Reference no: EM13933743

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