Apparent inferiority of gold to stocks with respect

Assignment Help Finance Basics
Reference no: EM132169130

Stocks offer an expected rate of return of 10% with a standard deviation of 20% and gold offers an expected return of 5% with a standard deviation of 25%.

1. In light of the apparent inferiority of gold to stocks with respect to both mean return and volatility, would anyone hold gold?

2. How would you answer (a) if the correlation coefficient between gold and stocks were 1?

Reference no: EM132169130

Questions Cloud

Analyze the significance of why suicide is becoming : The truth of the matter is that this number is probably much higher due to underreported instances of intentional death.
What is the initial outlay of project : If the firm undertakes this project, $50,000 in net working capital investment is required. What is the initial outlay of this project?
How much is the net proceed from the sale : If the company has the marginal tax rate of 35%, how much is the net proceed from the sale of this old asset.
What is the tax implication from the sale of old asset : If Sany can sell the machine for $200,000 today, what is the tax implication from the sale of this old asset? Assume that the tax rate is 40%.
Apparent inferiority of gold to stocks with respect : 1. In light of the apparent inferiority of gold to stocks with respect to both mean return and volatility, would anyone hold gold?
Describe some financial literacy strategies : Describe some financial literacy strategies that can implement within an organization.
Discuss the main reasons false confessions occur : Discuss the main reasons false confessions occur and the key reforms aimed at reducing them.
Intrusion detection system comparison : Intrusion Detection System Comparison - Discuss the differences between host- and network-based intrusion detection systems along with the pros and cons
What is the net present value of project : The firm's marginal tax rate is 40 percent and the cost of capital for this project is 8%. What is the net present value of this project

Reviews

Write a Review

Finance Basics Questions & Answers

  How many funds will be used by a state or local government

Which organization provides a service whereby it issues a certificate of conformance to governmental units with financial reports that meet its standards?

  Qwinery requires 500000 for expansion of its warehouse

q.winery requires 500000 for expansion of its warehouse. company plans to finance 100000 with internally generated

  What is the difference between a 401-k and an ira

What is the difference between a 401-K and an IRA? Should I have both? Can I have both? How does a 401-K fit into retirement planning and how does an IRA fit into retirement planning?

  Compute different valuation ratios

Compute three different valuation ratios, three different profitability ratios, and three financial strength ratios for each of the three years.

  Jackson-timberlake wardrobe company stock

The Jackson-Timberlake Wardrobe Company stock, what is the current price? What will the price in in 3 years? In 15 years?

  Prepare a chart summarizing the details of the investment

Write a two to three paragraph summary in which you: Create a chart summarizing the details of the investment for both Bob and Lisa. Explain the results in terms of time value of money.

  What would its future value be

What's the future value of a 7%, 5-year ordinary annuity that pays $300 each year? If this was an annuity due, what would its future value be?

  Did management do a good average or poor job

Assignment: Green Pastures Static Budget Income Statement. Did management do a good, average, or poor job of controlling expenses?

  How much is the investment worth two years

At that time the interest rate is changed to 6.12% compounded monthly. How much is the investment worth two years after the change in interest rate?

  What is portfolio beta-shirley paul

Shirley Paul's 2-stock portfolio has a total value of $120,000. $27,500 is invested in Stock A with a beta of 0.65 and the remainder

  Which of the following prizes has the highest present value

May has just won a lottery, which offers a choice in how she may receive her prize. If the interest rate is 10% per annum, compounded annually

  Why a business may not want to hold too much working capital

Examine the key reasons why a business may not want to hold too much or too little working capital. Provide examples that illustrate the consequences of either situation.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd