USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -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 ( $\sigma$i), covariance (COV_i,j), and asset weight (W_i) are as shown above? A) 11% B) 12% C) 13% D) 14% E) 15%

Question

Quizplus · Accepted Answer

The expected return of a portfolio of two risky assets can be calculated using the formula: E(Rp) = w1 * E(R1) + w2 * E(R2), where w1 and w2 are the weights of the assets in the portfolio, and E(R1) and E(R2) are the expected returns of the assets. Given the information provided, the expected return is 15%.

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) σ\sigmaσ I), Covariance (COVi,j), and Asset Weight (Wi) Are as Shown

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
$\sigma$ I), Covariance (COV_i,j), and Asset Weight (W_i) Are as Shown