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:

Unexpectedly Hospitalized

The unforeseen admission of a person to a hospital for medical care.

Cognitive Restructuring

A psychological technique aimed at identifying and challenging negative and irrational thoughts and replacing them with more balanced and constructive ones.

Coping Abilities

The skills and strategies individuals use to manage stress, challenges, or adversity.

Stress

A response by the body and mind to challenges or demands, characterized by physical, emotional, or psychological strain or tension.