j. It is said that the key factor that determines the risk of stocks in a large portfolio is not the risk of the individual assets but the covariances of the securities in the portfolio. What does this mean?

k. What do you expect the correlation between Gold and the S&P 500 to be based on theoretical arguments?

l. Using the Excel file Gold/Market provided, find the correlation between Gold and the S&P 500 index. (attach your completed excel file as part of your submission).

m. What is the implication of this correlation for an investor who holds the S&P 500 and wants to add Gold to his/her portfolio?