a. Calculate the portfolio return over the 4-year period for each of the 3 alternatives. % (Round to two decimal places.) Alternative 1: Data table (Click on the icon here in order to copy its contents of the data table be a spreadsheet.) Year 2021 2022 2023 2024 Expected Return Asset A Asset B Asset C 8% 10% 4% 10% 8% 6% 12% 6% 8% 14% 4% 10% Data table (Click on the icon here in order to copy its contents of the data tab a spreadsheet.) Alternative 1 2 3 Investment 100% of asset A 40% of asset A and 60% of asset B 40% of asset A and 60% of asset C
a. Calculate the portfolio return over the 4-year period for each of the 3 alternatives. % (Round to two decimal places.) Alternative 1: Data table (Click on the icon here in order to copy its contents of the data table be a spreadsheet.) Year 2021 2022 2023 2024 Expected Return Asset A Asset B Asset C 8% 10% 4% 10% 8% 6% 12% 6% 8% 14% 4% 10% Data table (Click on the icon here in order to copy its contents of the data tab a spreadsheet.) Alternative 1 2 3 Investment 100% of asset A 40% of asset A and 60% of asset B 40% of asset A and 60% of asset C
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Ch5 q 3 practice
Transcribed Image Text:**Instructions for Portfolio Return Calculation**
a. Calculate the portfolio return over the 4-year period for each of the 3 alternatives.
**Alternative 1:** _______ % (Round to two decimal places.)
**Data Tables:**
1. **Expected Return Table**
| Year | Asset A | Asset B | Asset C |
|------|---------|---------|---------|
| 2021 | 8% | 10% | 4% |
| 2022 | 10% | 8% | 6% |
| 2023 | 12% | 6% | 8% |
| 2024 | 14% | 4% | 10% |
*(Click on the icon to copy the contents of the data table to a spreadsheet.)*
2. **Investment Alternatives Table**
| Alternative | Investment |
|-------------|--------------------------------|
| 1 | 100% of asset A |
| 2 | 40% of asset A and 60% of asset B |
| 3 | 40% of asset A and 60% of asset C |
*(Click on the icon to copy the contents of the data table to a spreadsheet.)*
**Explanation:**
To determine the overall portfolio return for each alternative, you would multiply the expected return of each asset by its percentage allocation within the portfolio for each year, then sum these values. Repeat this for all four years and calculate an average or total as desired.
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