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You are in a world where there are two assets: gold and stocks. You are...

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Finance

You are in a world where there are two assets: gold and stocks. You are interested in investing your money in one or both of these assets. You collect the following data on the returns of these two assets over the past six years: Gold Stock Market Average Return 10% 18% Standard Deviation 30% 22% Your estimate of the correlation between gold and stocks is negative -0.40. What are the weightings of a portfolio composed of gold and stocks that has the lowest possible risk? Select one: a. 39% in gold and 61% in stocks b. 43% in gold and 57% in stocks c. 61% in gold and 39% in stocks d. 57% in gold and 43% in stocks e. 33% in gold and 67% in stocks

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