The following annual rates of return on David Jones are for the period 2000-2008. Returns (%)...

   

 

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The following annual rates of return on David Jones are for the period 2000-2008. Returns (%) David Jones Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 Calculate: (a) (b) 34.6 -18.2 -48.3 13.5 8.3 -15.3 12.9 12.9 -6.2 the average annual realized return, the standard deviation of realized returns. Part (b) (5 marks) A broker has advised your uncle, who lives in Canberra and is near retirement, not to invest in gold shares because, in his opinion, they are far too risky. He has shown your uncle evidence of how wildly the prices of gold shares have fluctuated in the recent past. He demonstrated that the standard deviation of gold shares is very high relative to most shares. Do you think the broker's advice is sound? The following annual rates of return on David Jones are for the period 2000-2008. Returns (%) David Jones Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 Calculate: (a) (b) 34.6 -18.2 -48.3 13.5 8.3 -15.3 12.9 12.9 -6.2 the average annual realized return, the standard deviation of realized returns. Part (b) (5 marks) A broker has advised your uncle, who lives in Canberra and is near retirement, not to invest in gold shares because, in his opinion, they are far too risky. He has shown your uncle evidence of how wildly the prices of gold shares have fluctuated in the recent past. He demonstrated that the standard deviation of gold shares is very high relative to most shares. Do you think the broker's advice is sound?

Answer rating: 100% (QA)

The brokers advice might have some merit but its not a onesizefitsall answer Heres why 1 Risk Tolera... View the full answer