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You receive a flier from an unleaded gasoline commodity broker. It shows that historical retums on unleaded gasoline have been 20% per year on average
You receive a flier from an unleaded gasoline commodity broker. It shows that historical retums on unleaded gasoline have been 20% per year on average for the last 20 years. The covariance of gasoline with the market is .08, the standard deviation of the market is 20, and the standard deviation of gasoline is 35%. The risk-free rate is 1.0%, the expected return of the market is What are your expected returns from investing in gasoline (enter as a decimal, not in percentage terms!)
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