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Exhibit 77
Use the Information Below for the Following Problem(S)

question 22

Multiple Choice

Exhibit 7.7
Use the Information Below for the Following Problem(S)
ARE+(A)  AFEE (E) (RA) =7/E(RB) =9%(σA) =6%(σB) =5%WA=0.6WB=0.4COVA,B=0.0014\begin{array} { c c } A R _ { E } + ( A ) & \text { AFEE } ( \mathbf { E } ) \\\hline \left( R _ { A } \right) = 7 / & E \left( R _ { B } \right) = 9 \% \\\left( \sigma _ { A } \right) = 6 \% & \left( \sigma _ { B } \right) = 5 \% \\W _ { A } = 0.6 & W _ { B } = 0 .4 \\C O V _ { A , B } =0 .0014\end{array}
-Refer to Exhibit 7.7.What is the standard deviation of this portfolio?

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Definitions:

Nonconforming Goods

Goods delivered by a vendor that do not meet the specifications or quality standards agreed upon in a contract.

Specified Goods

Items that are explicitly defined or identified in a transaction or contract.

Contract

An agreement based on mutual promises between two or more competent parties to do or to refrain from doing some particular thing that is neither illegal nor impossible. The agreement results in an obligation or a duty that can be enforced in a court of law.

Warranty of Fitness

An assurance that a product or service is suitable for the specific purpose for which it was bought, often implied in sales contracts.

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