Question
In: Finance
Q3.15You have been given the following return data on three assets: F, G and H and...
Q3.15You have been given the following return data on three assets: F, G and H and the two portfolios – over the period 2013 to 2016:
|
Year |
Asset F |
Asset G |
Asset H |
Portfolio FG |
Portfolio FH |
|
2013 |
16 |
17 |
14 |
16.5 |
15 |
|
2014 |
17 |
16 |
15 |
16.5 |
16 |
|
2015 |
18 |
15 |
16 |
16.5 |
17 |
|
2016 |
19 |
14 |
17 |
16.5 |
18 |
Using these assets, you have isolated three investment alternatives:
- 100% of Asset F
- 50% of Asset F and 50% of Asset G
- 50% of Asset F and 50% of Asset H
Required:
- Calculate the expected return for each of the three investment alternatives
- Calculate the standard deviation of returns for each of the three investment alternatives
- Based on your findings above, which of the three investment alternatives would you recommend? Justify your choice.
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
As nothing was mentioned excel is used. If you need with formula, let me know, will do that also. Thank you.
jeff jeffy answered 1 year agoRelated Solutions
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Year
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Asset H
2015
9
12
15
2016
8
9
16
2017
5
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19
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13
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11
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12
15
2016
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2017
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19
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Asset H
2015
9
12
15
2016
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9
16
2017
5
21
19
2018
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Now consider a portfolio that consists of 25% of F, 50% of G
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2016 8 9 16
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2019
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2020
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2021
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J
Prj
Return rj
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Return rj
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.20
10
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10
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20
3
.40
0
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-20
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10
4
.20
-5
.20
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5
.10
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.10
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2018
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1
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