Use the Information for the Question(s)below

question 116

Essay

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.
-Will adding the precious metals fund improve your portfolio?

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Definitions:

Adolescent Egocentrism

A developmental stage where teenagers excessively focus on themselves and are often unable to see things from others' perspectives.

Sense of Invincibility

This refers to a psychological state where an individual feels incapable of being defeated or experiencing harm.

Temperament

An individual’s characteristic manner of thinking, behaving, or reacting, often considered as innate rather than learned.

Difficult

Possessing or posing a challenge or requiring great effort or skill to accomplish, deal with, or understand.