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Expected return equal

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Stock A offers an expected return equal to 18% with a standard deviation equal to 22%. Gold offers an expected return equal to 10% with a standard deviation equal to 30%. The correlation between stock A and gold is equal to +1.00 Which of the following is correct? Rational risk-averse investors:

  • Will not hold gold
  • Might hold gold depending on their preferences
  • Will only hold gold in some combination with stocks

Reference no: EM131318274

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