Exhibit 712
Use the Information Below for the Following Problem(S)

question 76

Multiple Choice

Exhibit 7.12
Use the Information Below for the Following Problem(S)
$\begin{array}{cc}\text { Asset } 1 & \text { Asset 2 } \\\hline E\left(R_{1}\right) =.12 & E\left(R_{2}\right) =.16 \\E\left(\sigma_{1}\right) =.04 & E\left(\sigma_{2}\right) =.06\end{array}$
-Refer to Exhibit 7.12.Calculate the expected returns and expected standard deviations of a two stock portfolio when r?,? = .80 and w? = .60.

• A) .144 and .0002
• B) .144 and .0018
• C) .136 and .0045
• D) .136 and .0455
• E) .136 and .4554

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Definitions:

Corporate Profits Tax

A tax imposed on the income or profit of corporations, calculated as a percentage of their earned income.

Investment

The distribution of funds or other resources with the aim of achieving income or profit at a later date.

Business Firms

Organizations involved in the trade of goods, services, or both to consumers, operating in an attempt to profit.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan amount.