Exhibit 711
Use the Information Below for the Following Problem(S)

question 81

Multiple Choice

Exhibit 7.11
Use the Information Below for the Following Problem(S)
$\begin{array}{ccc}\text { Asset } 1 & & \text { Asset 2 } \\\hline E\left(R_{1}\right) =0.28& & E\left(R_{2}\right) =0.12 \\E\left(\sigma_{1}\right) =0.15 & &E\left(\sigma_{2}\right) =0.11 \\W_{1}=0.42 & & W_{2}=0.58 \\& r_{12}=0.7 &\end{array}$
-Refer to Exhibit 7.11.Calculate the expected return of the two stock portfolio.

• A) 0.107
• B) 0.1367
• C) 0.1169
• D) 0.1872
• E) 0.20

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Definitions:

Marginal Cost

The enhancement in overall pricing due to the generation of an extra unit of a good or service.

Cost Curves

Graphical representations used in economics to show the total cost of producing different quantities of output, helping businesses determine optimal production levels.

Average Fixed

Assuming it's intended as "Average Fixed Costs," it is the fixed costs divided by the quantity of output, representing the cost per unit that does not change with the level of production.

Average Total

Typically refers to the average total cost, which is the total cost of production divided by the number of goods produced.