Exhibit 79
Use the Information Below for the Following Problem(S)

question 75

Multiple Choice

Exhibit 7.9
Use the Information Below for the Following Problem(S)
$$\begin{array} { c c } Asset( A ) & \text { Asset } (B) \\\mathrm { E } \left( R _ { A } \right) = 19 \% & \mathrm { E } \left( \mathrm { R } _ { B } \right) = 13 \% \\\left( \sigma _ { A } \right) = 7\% & \left( \sigma _ { B } \right) = 6 \% \\W _ { A } =0 .3 & W _ { B } = 0 .7 \\C O V _ { A , B } =0 .0011\end{array}$$
-Refer to Exhibit 7.9.What is the standard deviation of this portfolio?

• A) 5.16%
• B) 5.89%
• C) 6.11%
• D) 6.57%
• E) 7.02%

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Definitions:

Population Variance

A measure of the spread or dispersion of a set of data points in a population, calculated as the average of the squared differences from the mean.

Sample Variance

The measure of variation within a sample dataset, indicating how spread out the sample points are from their sample mean.

Denominator

The bottom number in a fraction, representing the total number of equal parts the whole is divided into.

Interval Estimate

A range of values, calculated from sample data, that is likely to include the true value of a population parameter.