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?