Exhibit 79
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 53

Multiple Choice

Exhibit 7.9
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c } \text { Asset } ( \mathrm { A } ) & \text { Asset } ( \mathrm { B } ) \\\hline \mathrm { E } \left( \mathrm { R } _ { \mathrm { A } } \right) = 18 \% & \mathrm { E } \left( \mathrm { R } _ { \mathrm { B } } \right) = 13 \% \\\left( \sigma _ { \mathrm { A } } \right) = 7 \% & \left( \sigma _ { \mathrm { B } } \right) = 6 \% \\W _ { \mathrm { A } } = 0.3 & W _ { \mathrm { B } } = 0.7 \\\mathrm { COV } V _ { \mathrm { A,B } } = 0.0011\end{array}$$
-Refer to Exhibit 7.9. What is the expected return of a portfolio of two risky assets if the expected return E(R_i) , standard deviation ( $\sigma$ _i) , covariance (COV_i,j) , and asset weight (W_i) are as shown above?

• A)10.10%
• B)11.60%
• C)13.88%
• D)14.50%
• E)15.37%

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Definitions:

Deputy Sheriff

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African Americans

A term referring to citizens or residents of the United States who have ancestry from the black racial groups of Africa.

North

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