Exhibit 712
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 12

Multiple Choice

Exhibit 7.12
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c } \text { Asset 1 } & \text { Asset 2 } \\\hline E \left( R _ { 1 } \right) = .12 & E \left( R _ { 2 } \right) = .16 \\E \left( \sigma _ { 1 } \right) = .04 & E \left( \sigma _ { 2 } \right) = .06\end{array}$$
-Refer to Exhibit 7.12. Calculate the expected returns and expected standard deviations of a two stock portfolio when r_1,2 = .80 and w₁ = .60.

• A).144 and .0002
• B).144 and .0018
• C).136 and .0045
• D).136 and .0455
• E).136 and .4554