Stocks offer an expected rate of return of 10% with a standard deviation of 20%, and gold

Question:

offer an expected rate of return of 10% with a standard deviation of 20%, and gold offers an of 5% with a standard deviation of 25%.
a. In light of the apparent inferiority of gold to with respect to both mean return and volatility, would anyone hold gold? If so, demonstrate graphically why one would do so.
b. How would you answer (a) if the correlation coefficient between gold and were 1? Draw a graph illustrating why one would or would not hold gold. Could these expected returns, standard deviations, and correlation represent an equilibrium for the security market?
Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...