Exhibit 6-9
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 12

Multiple Choice

Exhibit 6-9
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c}\begin{array}{cc}\text { Asset }(\mathrm{A}) & \text { Asset }(\mathrm{B}) \\\hline \mathrm{E}\left(\mathrm{R}_{\mathrm{A}}\right) =18 \% & \mathrm{E}\left(\mathrm{R}_{\mathrm{B}}\right) =13 \% \\\left(\sigma_{\mathrm{A}}\right) =7 \% & \left(\sigma_{\mathrm{B}}\right) =6 \% \\\mathrm{~W}_{\mathrm{A}}=0.3 & \mathrm{~W}_{\mathrm{B}}=0.7\end{array}\\\mathrm{COV}_{\mathrm{AB}}=0.0011\end{array}$
-Refer to Exhibit 6-9. What is the expected return of a portfolio of two risky assets if the expected return E(R_i) , standard deviation (?_i) , covariance (COV_i,j) , and asset weight (W_i) are as shown above?

• A) 10.10%
• B) 11.60%
• C) 13.88%
• D) 14.50%
• E) 15.37%

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Definitions:

Manufacturing Departments

Specialized functional areas within a manufacturing facility where specific stages of production are carried out.

Machine-Hours

A measurement of production time using the number of hours machines are operated.

Manufacturing Overhead

All indirect costs related to the manufacturing process, such as utilities, rent for manufacturing facilities, and maintenance of equipment.

Job-Order Costing System

An accounting system that collects costs for each individual job or project separately to determine its profitability, commonly used in manufacturing or services where goods or services are produced on a bespoke basis.