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.

                                        Expected return

Year           Asset F       Asset G      Asset H

2016          16%             17%           14%

2017          17                16              15

2018          18                15              16

2019          19                14              17

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 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?