Question: Please include graphs! Thank you! 1. Stocks offer an expected rate of return of 18%, with a standard deviation of 22%. Gold offers an expected

Please include graphs! Thank you! 1. Stocks offer an expected rate of

Please include graphs! Thank you!

1. Stocks offer an expected rate of return of 18%, with a standard deviation of 22%. Gold offers an expected return of 4% with a standard deviation of 30%. (a) In light of the apparent inferiority of gold with regard to both expected return and standard deviation, would anyone hold gold? If so, demonstrate graphically why one would do so. (b) Given the information above, re-answer part (a) with an additional assumption that the correlation coefficient between gold and stocks equals 1 . Draw a graph illustrating why one would or would not hold gold in one's portfolio

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