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Calculate the average expected return on portfolio X and Y

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Question - The following table shows the expected returns on three assets X, Y, Z for the period 2017-2021. Assume that the investor is willing to form a portfolio of X and Y or X and Z. He also is planning to invest 2/3 of his investment funds in X and 1/3 in Y or Z.

Year

Rx(%)

Ry(%)

Rz(%)

2017

8

24

8

2018

10

20

12

2019

12

16

16

2020

14

12

20

2021

16

8

24

Required - Answer the following questions accordingly:

1. Calculate the average expected return on portfolio X and Y.

2. Calculate the average expected return on portfolio X and Z.

3. Calculate the standard deviation of portfolio X and Y.

4. Calculate the standard deviation of portfolio X and Z.

5. What is your advise to this investor.

Reference no: EM132729976

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