Exhibit 710
Use the Information Below for the Following Problem(S)

question 50

Multiple Choice

Exhibit 7.10
Use the Information Below for the Following Problem(S)
$$\begin{array} { c c } Asset ( A ) & \text { Asset(B) } \\\mathrm { E } \left( R _ { A } \right) = 16 \% & \mathrm { E } \left( \mathrm { R } _ { B } \right) = 14 \% \\\left( \sigma _ { A } \right) = 3 \% & \left( \sigma _ { B } \right) = 0 \% \\W _ { A } =0 .5 & W _ { B } =0 .5 \\C O V _ { A , B } =0 .0014\end{array}$$
-Refer to Exhibit 7.10.What is the expected return of a portfolio of two risky assets if the expected return E(R?) ,standard deviation (s?) ,covariance (COV?,?) ,and asset weight (W?) are as shown above?

• A) 11%
• B) 12%
• C) 13%
• D) 14%
• E) 15%

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Definitions:

Achievement Orientations

A concept in psychology that delineates how individuals attribute their successes and failures to different factors such as effort, ability, or external circumstances.

Peer Pressure

The influence exerted by a peer group, encouraging individuals to change their attitudes, values, or behaviors to conform to group norms.

Clique

A small, exclusive group of individuals bound together by common interests or friendship.

Crowd

A large group of individuals gathered in a specific location, often without a common goal or direction.