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Exhibit 6.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   Asset (A) Asset (B) E(RA) = 25% E(RB) = 15% (σA) = 18% (σB) = 11% WA = 0.75 WB = 0.25 COVA,B = −0.0009   Refer to Exhibit 6.2. What is the expected return of a portfolio of two risky assets if the expected return E(Ri), standard deviation ( σ i ), covariance (COVi,j), and asset weight (Wi) are as shown above?   a. 18.64%   b. 22.5%   c. 11%   d. 13.65%   e. 20.0%

Exhibit 6.2 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)   Asset (A) Asset (B) E(RA) = 25% E(RB) = 15% (σA) = 18% (σB) = 11% WA = 0.75 WB = 0.25 COVA,B = −0.0009   Refer to Exhibit 6.2. What is the expected return of a portfolio of two risky assets if the expected return E(Ri), standard deviation ( σ i ), covariance (COVi,j), and asset weight (Wi) are as shown above?   a. 18.64%   b. 22.5%   c. 11%   d. 13.65%   e. 20.0%

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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QUESTION 2

  1. Exhibit 6.2

    USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

     

    Asset (A)

    Asset (B)

    E(RA) = 25%

    E(RB) = 15%

    (σA) = 18%

    (σB) = 11%

    WA = 0.75

    WB = 0.25

    COVA,B = −0.0009

     


    Refer to Exhibit 6.2. What is the expected return of a portfolio of two risky assets if the expected return E(Ri), standard deviation ( σ i ), covariance (COVi,j), and asset weight (Wi) are as shown above?
      a.
    18.64%
      b.
    22.5%
      c.
    11%
      d.
    13.65%
      e.
    20.0%
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