ABC Company has hired you to explain the criteria for assessing the performance of a security, namely expected rate of return, standard deviation of rate of
return, and coefficient of variation (CV).
Also, they want you to demonstrate how by forming a portfolio, an instrument can be generated that has properties better than each of its constituents in
terms of the standard deviation of rate of return and CV.
How would you explain and show this information to ABC Company in a 200-250-word response, supported by relevant academic and peer-reviewed
information?