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(a)
Adequate information:
Expected
Standard deviation on stock is20%.
Expected rate of return on gold is 5%.
Standard deviation on gold is 25%.
Introduction:
Expected rate of return is calculated as a percentage return that is expected to be earned by an investor over a period of time. The standard deviation is commonly used to measure the dispersionof data from its average.
(b)
Adequate information:
Correlation coefficient between stock and gold is 1
Expected rate of return on stock is 10%.
Standard deviation on stock is 20%.
Expected rate of return on gold is 5%.
Standard deviation on gold is 25%.
Introduction:
Expected rate of return is calculated as a percentage return that is expected to be earned by an investor over a period of time. While the standard deviation is the measure of dispersion of a set of data from its mean.
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Chapter 6 Solutions
Connect 1-Semester Access Card for Essentials of Investments
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
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