Portfolio analysis You have been given the expected return data shown in the first table on three assets-F, G, and H-over the period 2016-2019: Using these assets, you have isolated the three investment alternatives shown in the following table: a. Calculate the average 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 think performed better over this period? Why? a. The expected return over the 4-year period for alternative 1 is %. (Round to two decimal place.) i Data Table - X - X Data Table (Click on the icon here O in order to copy the contents of the data table below into a spreadsheet.) Alternative Investment Expected Return Asset G 21% 1 100% of assetF Year Asset F Asset H 2 50% of asset F and 50% of asset G 50% of asset F and 50% of asset H 2016 2017 20% 18% 3 21% 22% 20% 19% 19% 2018 20% 2019 23% 18% 21% Print Done Print Done
Portfolio analysis You have been given the expected return data shown in the first table on three assets-F, G, and H-over the period 2016-2019: Using these assets, you have isolated the three investment alternatives shown in the following table: a. Calculate the average 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 think performed better over this period? Why? a. The expected return over the 4-year period for alternative 1 is %. (Round to two decimal place.) i Data Table - X - X Data Table (Click on the icon here O in order to copy the contents of the data table below into a spreadsheet.) Alternative Investment Expected Return Asset G 21% 1 100% of assetF Year Asset F Asset H 2 50% of asset F and 50% of asset G 50% of asset F and 50% of asset H 2016 2017 20% 18% 3 21% 22% 20% 19% 19% 2018 20% 2019 23% 18% 21% Print Done Print Done
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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please do A-D
Transcribed Image Text:**Portfolio Analysis**
You have been provided with expected return data for three assets—F, G, and H—over the period from 2016 to 2019. Using these assets, three investment alternatives have been identified, as shown in the following tables.
**Tasks:**
a. Calculate the average 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. Based on your findings, determine which of the three investment alternatives performed better over this period and explain why.
### Data Table: Investment Alternatives
| 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 |
### Data Table: Expected Returns
| Year | Asset F | Asset G | Asset H |
|------|---------|---------|---------|
| 2016 | 20% | 21% | 18% |
| 2017 | 21% | 20% | 19% |
| 2018 | 22% | 19% | 20% |
| 2019 | 23% | 18% | 21% |
**Example Calculation:**
a. The expected return over the 4-year period for alternative 1 is ____ %. (Round to two decimal places.)
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