Calculate the standard deviation of returns

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Question - You have been given the following return data on 3 assets- F, G, and H over the period 2013-2016.

Expected Return (%)

Year

Asset F

Asset G

Asset H

2013

16

17

14

2014

17

16

15

2015

18

15

16

2016

19

14

17

Using these assets, you have isolated there investment alternatives:

Alternative 1: Invest 100% in Asset F

Alternative 2: Invest 50% in Asset F and 50% in Asset G

Alternative 3: Invest 50% in Asset F and 50% in Asset H

Required -

(a) Calculate the portfolio return over the four-year period for each of the three alternatives.

(b) Calculate the standard deviation of returns over the four-year period for each of the three alternatives.

(c) On the basis of your findings in Part A and B, which of the three investment alternatives you recommend? Why?

Reference no: EM133101135

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