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:

Excitement

A state or feeling of great enthusiasm and eagerness, characterized by increased physiological activity.

Excitement Stage

A phase of the human sexual response cycle characterized by increased arousal and physical changes, such as erection and lubrication.

Refractory Period

A period immediately following the stimulation during which a nerve or muscle is unresponsive to further stimulation.