Use the Information for the Question(s)below

question 65

Multiple Choice

Use the information for the question(s) below.
You are presently invested in the Luther Fund,a broad-based mutual fund that invests in stocks and other securities.The Luther Fund has an expected return of 14% and a volatility of 20%.Risk-free Treasury bills are currently offering returns of 4%.You are considering adding a precious metals fund to your current portfolio.The metals fund has an expected return of 10%,a volatility of 30%,and a correlation of -.20 with the Luther Fund.
-The required return on the precious metals fund is closest to:

• A)-3%.
• B)4%.
• C)1%.
• D)10%.

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Definitions:

Commitment

The state or quality of being dedicated to a cause, activity, or job.

Compliance

The act of conforming to rules, standards, or instructions, often in a legal, ethical, or organizational context.

Resistance

Opposition or pushback against proposals, changes, or directives perceived as unwanted or detrimental.

Exchange Tactic

is a strategy in negotiations where something is offered in return for something from the other party.