Question
the following table provides the expected return and standard deviation for stock and gold.your client is currently holding a portfolio of stocks and he is
the following table provides the expected return and standard deviation for stock and gold.your client is currently holding a portfolio of stocks and he is considering whether he should replace half of the stocks with gold.
Calculated the portfolio expected returns and standard deviation,and dicuss how you would advise your client ,based on the following information:
stock:expected return is 16% and standard deviation is 24%
gold:expected return is 12% and standard deviation is 28%
1)if the correlation coefficient between the returns on gold and stock was 0
2)if the correlation coefficient between the returns on gold and stock was 1
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