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

question 19

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 return and expected standard deviation of a two stock portfolio when r_1,2 = -.60 and w₁ = .75.

• A).13 and .0024
• B).13 and .0455
• C).12 and .0585
• D).12 and .5585
• E).13 and .6758

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Definitions:

Certainty

The state of being sure or confident about something, often used in decision-making processes.

Certainty

The state of being sure or confident about something, often without doubt or question.

Micro

Refers to small-scale, often detailed or specific considerations or processes in a given context.

Macro Concept

A broad idea or principle that applies to large-scale phenomena or systems.