Exhibit 7.2
Use the Information Below for the Following Problem(S)
$$\begin{array} { c c }
A _ { 1 } + ( A ) & \text { AEEE } ( \mathbf { E } ) \
\hline E \left( R _ { A } \right) = 25 \% & E \left( R _ { B } \right) = 15 \% \
\left( \sigma _ { A } \right) = 19 \% & \left( \sigma _ { B } \right) = 11 \% \
W _ { A } =0 .75 & W _ { B } =0 .25 \
C O V _ { A , B } = - 0.0009
\end{array}$$
-Refer to Exhibit 7.2.What is the expected return of a portfolio of two risky assets if the expected return E(R?),standard deviation (s?),covariance (COV?,?),and asset weight (W?)are as shown above?
A) 18.64%
B) 20.0%
C) 22.5%
D) 13.65%
E) 11%

Question

Exhibit 7.2
Use the Information Below for the Following Problem(S)
 $$\begin{array} { c c } 
A _ { 1 } + ( A ) & \text { AEEE } ( \mathbf { E } ) \
\hline E \left( R _ { A } \right) = 25 \% & E \left( R _ { B } \right) = 15 \% \
\left( \sigma _ { A } \right) = 19 \% & \left( \sigma _ { B } \right) = 11 \% \
W _ { A } =0 .75 & W _ { B } =0 .25 \
C O V _ { A , B } = - 0.0009
\end{array}$$
-Refer to Exhibit 7.2.What is the expected return of a portfolio of two risky assets if the expected return E(R?),standard deviation (s?),covariance (COV?,?),and asset weight (W?)are as shown above?
A) 18.64%
B) 20.0%
C) 22.5%
D) 13.65%
E) 11%

Quizplus · Accepted Answer

$$\begin{aligned}
\mathrm { E } \left( R _ { \mathrm { a } } \right) & = W _ { \mathrm { A } } \mathrm { E } \left( R _ { \mathrm { A } } \right) + W _ { \mathrm { B } } \mathrm { E } \left( \mathrm { R } _ { \mathrm { H } } \right) \
& = ( 0.75 ) ( 25 ) + ( 0.25 ) ( 15 ) = 22.5 \%
\end{aligned}$$

Exhibit 72 Use the Information Below for the Following Problem(S)

Exhibit 72
Use the Information Below for the Following Problem(S)