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  #11  
Old 06-08-2017, 08:40 AM
xishi xishi is offline
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Generally, the investment in commodity is less sensitive to the economic business cycle and therefore provides a diversification benefit.

Last edited by xishi; 06-08-2017 at 08:44 AM..
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  #12  
Old 01-17-2018, 10:54 PM
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Originally Posted by trapperj View Post
I can't think of any justifiable reason why you would recommend having stacks of gold bricks around. It's a fund not a pirate's treasure.
But that's how the Count of Monte Cristo made his comeback
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  #13  
Old 01-18-2018, 11:42 AM
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  #14  
Old 01-19-2018, 11:25 AM
WDem WDem is offline
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One consideration I didn't see mentioned in a quick read of this thread (outside of lamenting that gold won't give you any) are "rents" you might be able to get from owning the so-called alternative asset.
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  #15  
Old 01-19-2018, 03:25 PM
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By first glance, I knew that tasks 2 and 3 are applications of the classical Markowitz portfolio optimization theory. Check out your finance textbook. I taught these stuff in college. I am very sure that you can find the answer.
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  #16  
Old 01-19-2018, 04:32 PM
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By first glance, I knew that tasks 2 and 3 are applications of the classical Markowitz portfolio optimization theory. Check out your finance textbook. I taught these stuff in college. I am very sure that you can find the answer.
Don't you need correlation to calculate the portfolio risk/variance for MPT?
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Old 01-19-2018, 10:45 PM
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Originally Posted by chago04 View Post
Don't you need correlation to calculate the portfolio risk/variance for MPT?
Yes. That's why you can't really find the optimal portfolio. You are not given enough information. If you are given the variance-covariance table, then you can use a spreadsheet to find it.

They want you to explain the trade-off and choose a criteria. If you really know the answer, it will be two sentences.

Everyone will come up with a different portfolio. As long as you can justify your answer, you will MMR.
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  #18  
Old 01-22-2018, 03:57 AM
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Originally Posted by econfkw View Post
Yes. That's why you can't really find the optimal portfolio. You are not given enough information. If you are given the variance-covariance table, then you can use a spreadsheet to find it.

They want you to explain the trade-off and choose a criteria. If you really know the answer, it will be two sentences.

Everyone will come up with a different portfolio. As long as you can justify your answer, you will MMR.
Can it be enough if we just provide the asset with low to negative correlation to what already existed in the portfolio, and support the suggestion by listing the correlation coefficients? Is there any place we can find the correlation coefficients between asset class pairs online?
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  #19  
Old 02-04-2018, 01:04 PM
ImActuallyaResume ImActuallyaResume is offline
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I defended gold as the viable option of the 3 and MMR'd. You guys had me s***ing (gold) bricks for the past month!
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