| P8-14 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 2013-2016. |
| Forecasted Returns, Expected Values, and Standard Deviations for |
| Assets A, B, and C and Alternatives F, FG, FH |
| Assets |
| Year | A | B | C |
| 2013 | 16% | 17% | 14% |
| 2014 | 17% | 16% | 15% |
| 2015 | 18% | 15% | 16% |
| 2016 | 19% | 14% | 17% |
| | |
| | | | | |
| Statistics: |
| Expected value |
| Standard deviation |
| Using these assets, you have isolated the three investment alternatives shown in the following table. |
| 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 three alternatives. |
| b. Calculate the standard deviation of returns over the 4-year period for each of the 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? |
cybacatx
portfolio_analysis.xlsx
