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Exhibit 6-12
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 46

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Exhibit 6-12
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)  Asset 1  Asset 2 E(R1) =.12E(R2) =.16E(σ1) =.04E(σ2) =.06\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 6-12. Calculate the expected return and expected standard deviation of a two-stock portfolio when r?,? = -.60 and w? = .75.


Definitions:

Legal Cause

A legally recognized reason that directly links an action to a legal consequence, establishing liability.

Product Liability

The legal liability a manufacturer or trader incurs for producing or selling a faulty product.

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances.

Garnishment

A proceeding in which a creditor legally seizes a portion of a debtor's property, such as wages, that is in the possession of a third party, such as an employer.

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