Exhibit 6-10
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 67

Multiple Choice

Exhibit 6-10
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c}\begin{array}{cc}\text { Asset }(\mathrm{A}) & \text { Asset }(\mathrm{B}) \\\hline \mathrm{E}\left(\mathrm{R}_{\mathrm{A}}\right) =16 \% & \mathrm{E}\left(\mathrm{R}_{\mathrm{B}}\right) =14 \% \\\left(\sigma_{\mathrm{A}}\right) =3 \% & \left(\sigma_{\mathrm{B}}\right) =8 \% \\\mathrm{~W}_{\mathrm{A}}=0.5 & \mathrm{~W}_{\mathrm{B}}=0.5\end{array}\\\mathrm{COV}_{\mathrm{A,B}}=0.0014\end{array}$
-Refer to Exhibit 6-10. 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) 11%
• B) 12%
• C) 13%
• D) 14%
• E) 15%

Interpret the economic conditions that lead to recession and expansion phases.

Identify the measures taken during economic recessions to stabilize the economy.

Distinguish between deflation and disinflation.

Understand factors influencing perception and their impact on decision-making.

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Definitions:

Euphemisms

Mild or indirect words or phrases used to describe something unpleasant or sensitive without causing offense.

Negative Connotations

The association of a word or expression with negative feelings or judgments.

Formal Tone

The use of language that is polite, precise, and devoid of casual expressions, often found in professional or academic settings.

Humour

The quality of being amusing or comical, often expressed through narratives, jokes, or actions.