Question: Exhibit 7.4 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Asset (A) Asset (B) = = E(RA) = 10% E(RB) = 8% (CA) = 6%

Exhibit 7.4 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Asset

Exhibit 7.4 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Asset (A) Asset (B) = = E(RA) = 10% E(RB) = 8% (CA) = 6% (OB) = 5% WA = 0.3 We = 0.7 COVA.B = 0.0008 10. Refer to Exhibit 7.4. What is the expected return of a portfolio of two risky assets if the expected return E(Ri), standard deviation (01), covariance (COVij), and asset weight (W;) are as shown above? a. 8.6% b. 8.1% c. 9.3% d. 10.2% e. 11.6% 11. Refer to Exhibit 7.4. What is the standard deviation of this portfolio? a. 5.02% b. 3.88% c. 6.21% d. 4.04% e. 4.34%

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