Exhibit 79
Use the Information Below for the Following Problem(S)

question 75

Multiple Choice

Exhibit 7.9
Use the Information Below for the Following Problem(S)
$$\begin{array} { c c } Asset( A ) & \text { Asset } (B) \\\mathrm { E } \left( R _ { A } \right) = 19 \% & \mathrm { E } \left( \mathrm { R } _ { B } \right) = 13 \% \\\left( \sigma _ { A } \right) = 7\% & \left( \sigma _ { B } \right) = 6 \% \\W _ { A } =0 .3 & W _ { B } = 0 .7 \\C O V _ { A , B } =0 .0011\end{array}$$
-Refer to Exhibit 7.9.What is the standard deviation of this portfolio?

• A) 5.16%
• B) 5.89%
• C) 6.11%
• D) 6.57%
• E) 7.02%

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Definitions:

Clearinghouse Procedure

A process handled by a clearinghouse, which acts as an intermediary between buyers and sellers in financial markets, ensuring the smooth execution of transactions.

Drawer Liability

Drawer liability pertains to the legal responsibility of the person who writes or signs a check or draft to ensure the availability of sufficient funds in the account for the amount specified for payment.

Wrongfully Dishonored

Refers to a situation where a financial institution unjustifiably refuses to pay or accept a negotiable instrument when properly presented.

Proper Presentment

The formal presentation of a document in a way that follows legal requirements or norms.