-Refer to Exhibit 6A $\sigma$ 2) $\div$ [E $\sigma$ 1) -E $\sigma$ 2)]
B) E

question 2

Multiple Choice

-Refer to Exhibit 6A.1. Show the minimum portfolio variance for a two-stock portfolio when r_1.2 = 1.

• A) E( \(\sigma\)2) \(\div\) [E( \(\sigma\)1) -E( \(\sigma\)2)]
• B) E( \(\sigma\)2) \(\div\) [E( \(\sigma\)1) + E( \(\sigma\)2)]
• C) E( \(\sigma\)1) \(\div\) [E( \(\sigma\)1) - E( \(\sigma\)2)]
• D) E( \(\sigma\)1) \(\div\) [E( \(\sigma\)1) + E( \(\sigma\)2)]
• E) None of these are correct.

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Definitions:

Contribution Format

A method of income statement presentation that stresses the contribution margin, which is sales revenue minus variable costs.

Income Statement

A financial statement that shows a company’s revenues and expenses over a specific period, resulting in net profit or loss.

Net Operating Income

The total profit a company makes from its operations, excluding taxes and interest.

Fixed Monthly Expenses

Recurring expenses that do not vary in amount each month, such as rent or mortgage payments.