Exhibit 73
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 3

Multiple Choice

Exhibit 7.3
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c } \text { Asset } ( \mathrm { A } ) & \text { Asset } ( \mathrm { B } ) \\\hline \mathrm { E } \left( \mathrm { R } _ { \mathrm { A } } \right) = 9 \% & \mathrm { E } \left( \mathrm { R } _ { \mathrm { B } } \right) = 11 \% \\\left( \sigma _ { \mathrm { A } } \right) = 4 \% & \left( \sigma _ { \mathrm { B } } \right) = 6 \% \\W _ { \mathrm { A } } = 0.4 & W _ { \mathrm { B } } = 0.6 \\\mathrm { COV }_ { A,B } = 0.0011\end{array}$$
-Refer to Exhibit 7.3. 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)8.95%
• B)9.30%
• C)9.95%
• D)10.20%
• E)10.70%

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Definitions:

Profit Sharing

A company program in which employees receive a portion of the enterprise's profits, usually in addition to their regular compensation.

Organizational Performance Linkage

The connection between individual, team, or departmental performance and the overall success of an organization.

Compensation Mix

Compensation mix refers to the combination of different types of pay and benefits that an employer offers to its employees, including salaries, bonuses, stock options, and benefits.

Employee Commitment

The level of loyalty and dedication an employee feels towards their organization.