Exhibit 6-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S)

question 56

Multiple Choice

Exhibit 6-4
USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) $\begin{array}{c}\begin{array}{cc}\text { Asset }(\mathrm{A}) & \text { Asset }(\mathrm{B}) \\\hline \mathrm{E}\left(\mathrm{R}_{\mathrm{A}}\right) =10 \% & \mathrm{E}\left(\mathrm{R}_{\mathrm{B}}\right) =8 \% \\\left(\sigma_{\mathrm{A}}\right) =6 \% & \left(\sigma_{\mathrm{B}}\right) =5 \% \\\mathrm{~W}_{\mathrm{A}}=0.3 & \mathrm{~W}_{\mathrm{B}}=0.7\end{array}\\\mathrm{COV}_{\mathrm{AB}}=0.0008\end{array}$
-Refer to Exhibit 6-4. What is the standard deviation of this portfolio?

• A) 5.02%
• B) 3.88%
• C) 6.21%
• D) 4.04%
• E) 4.34%

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Definitions:

Stung

To feel a sharp, burning pain, often as a result of a bite or sting from an insect or plant.

Honeybee

A social insect, known for producing honey and beeswax, that plays a critical role in pollination.

Greenstick

A type of fracture in children where the bone bends and cracks, instead of breaking completely.

Fracture

Any break in a bone.