Exhibit 7.11 Use the Information Below for the Following Problem(S) \(\begin{array}{ccc} \text { Asset } 1 & & \text { Asset 2 } \\ \hline E\left(R_{1}\right)=0.28& & E\left(R_{2}\right)=0.12 \\ E\left(\sigma_{1}\right)=0.15 & &E\left(\sigma_{2}\right)=0.11 \\ W_{1}=0.42 & & W_{2}=0.58 \\ & r_{12}=0.7 & \end{array}\) -Refer to Exhibit 7.11.Calculate the expected return of the two stock portfolio.

A) 0.107 B) 0.1367 C) 0.1169 D) 0.1872 E) 0.20 A) 0.107 B) 0.1367 C) 0.1169 D) 0.1872 E) 0.20

What is the expected return of the three stock portfolio described below? \[\begin{array} { l c c } \text { Camuman Stack } & \text { Markat Value } & \text { Expacted Raturn } \\ \hline \text { Delton Inc. } & 50,000 & 10 \% \\ \text { Efley Co. } & 40,000 & 11 \% \\ \text { Grippon Inc. } & 60,000 & 16 \% \end{array}\]

A) 14.89% B) 16.22% C) 12.66% D) 13.85% E) 16.99% A) 14.89% B) 16.22% C) 12.66% D) 13.85% E) 16.99%

Exhibit 7.11 Use the Information Below for the Following Problem(S) \(\begin{array}{ccc} \text { Asset } 1 & & \text { Asset 2 } \\ \hline E\left(R_{1}\right)=0.28& & E\left(R_{2}\right)=0.12 \\ E\left(\sigma_{1}\right)=0.15 & &E\left(\sigma_{2}\right)=0.11 \\ W_{1}=0.42 & & W_{2}=0.58 \\ & r_{12}=0.7 & \end{array}\) -Refer to Exhibit 7.11.Calculate the expected standard deviation of the two stock portfolio.

A) 0.1367 B) 0.1872 C) 0.1169 D) 0.20 E) 0.3950 A) 0.1367 B) 0.1872 C) 0.1169 D) 0.20 E) 0.3950

Exhibit 7.9 Use the Information Below for the Following Problem(S) \[\begin{array} { c c } Asset( A ) & \text { Asset } (B)\\ \mathrm { E } \left( R _ { A } \right) = 19 \% & \mathrm { E } \left( \mathrm { R } _ { B } \right) = 13 \% \\ \left( \sigma _ { A } \right) = 7\% & \left( \sigma _ { B } \right) = 6 \% \\ W _ { A } =0 .3 & W _ { B } = 0 .7 \\ C O V _ { A , B } =0 .0011 \end{array}\] -Refer to Exhibit 7.9.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) 10.10% B) 11.60% C) 13.88% D) 14.50% E) 15.37% A) 10.10% B) 11.60% C) 13.88% D) 14.50% E) 15.37%

Exhibit 7.4 Use the Information Below for the Following Problem(S) \[\begin{array} { c c } Asset (A) & \text { Asset (B)} \\ \mathrm { E } \left( R _ { A } \right) = 1 [ \% & \mathrm { E } \left( \mathrm { R } _ { B } \right) = \mathrm { g } \% \\ \left( \sigma _ { A } \right) = 6 \% & \left( \sigma _ { B } \right) = 5 \% \\ W _ { A } =0 .3 & W _ { B } =0 .7 \\ C O V _ { A , B } =0 .0008 \end{array}\] -Refer to Exhibit 7.4.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) 8.6% B) 8.1% C) 9.3% D) 10.2% E) 11.6% A) 8.6% B) 8.1% C) 9.3% D) 10.2% E) 11.6%

Exam 7: An Introduction to Portfolio Management

Exhibit 7.11 Use the Information Below for the Following Problem(S) Asset 1 Asset 2 E =0.28 E =0.12 E =0.15 E =0.11 =0.42 =0.58 =0.7 -Refer to Exhibit 7.11.Calculate the expected return of the two stock portfolio.

(Multiple Choice)

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Question 81

What is the expected return of the three stock portfolio described below? Camuman Stack Markat Value Expacted Raturn Delton Inc. 50,000 10\% Efley Co. 40,000 11\% Grippon Inc. 60,000 16\%

(Multiple Choice)

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Question 82

The probability of an adverse outcome is a definition of

(Multiple Choice)

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Question 83

Exhibit 7.11 Use the Information Below for the Following Problem(S) Asset 1 Asset 2 E =0.28 E =0.12 E =0.15 E =0.11 =0.42 =0.58 =0.7 -Refer to Exhibit 7.11.Calculate the expected standard deviation of the two stock portfolio.

(Multiple Choice)

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Question 84

As the number of risky assets in a portfolio increases,the total risk of the portfolio decreases.

(True/False)

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Question 85

Exhibit 7.9 Use the Information Below for the Following Problem(S) Asset(A) Asset (B) =19\% =13\% =7\% =6\% =0.3 =0.7 CO=0.0011 -Refer to Exhibit 7.9.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?

(Multiple Choice)

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Question 86

A portfolio is efficient if no other asset or portfolios offer higher expected return with the same (or lower)risk or lower risk with the same (or higher)expected return.

(True/False)

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Question 87

Exhibit 7.4 Use the Information Below for the Following Problem(S) Asset(A) Asset (B) =1[\% =\% =6\% =5\% =0.3 =0.7 CO=0.0008 -Refer to Exhibit 7.4.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?

(Multiple Choice)

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Question 88

Between 1990 and 2000,the standard deviation of the returns for the NIKKEI and the DJIA indexes were 0.18 and 0.16,respectively,and the covariance of these index returns was 0.003.What was the correlation coefficient between the two market indicators?

(Multiple Choice)

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Question 89

The combination of two assets that are completely negatively correlated provides maximum returns.

(True/False)

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Question 90

An individual investor's utility curves specify the tradeoffs he or she is willing to make between

(Multiple Choice)

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Question 91

Given a portfolio of stocks,the envelope curve containing the set of best possible combinations is known as the

(Multiple Choice)

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Question 92

Exhibit 7.13 Use the Information Below for the Following Problem(S) A financial analyst covering Magnum Oil has determined the following four possible returns given four different states of the economy over the next period. Prabability Return 0.10 -.20 0.25 -.05 0.4[ 0.15 0.25 0.30 -Refer to Exhibit 7.13.Calculate the standard deviation for Magnum Oil.

(Multiple Choice)

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Question 93

Exhibit 7.11 Use the Information Below for the Following Problem(S) Asset 1 Asset 2 E =0.28 E =0.12 E =0.15 E =0.11 =0.42 =0.58 =0.7 -Refer to Exhibit 7.11.Calculate the expected return of the two stock portfolio.

What is the expected return of the three stock portfolio described below? Camuman Stack Markat Value Expacted Raturn Delton Inc. 50,000 10\% Efley Co. 40,000 11\% Grippon Inc. 60,000 16\%

The probability of an adverse outcome is a definition of

Exhibit 7.11 Use the Information Below for the Following Problem(S) Asset 1 Asset 2 E =0.28 E =0.12 E =0.15 E =0.11 =0.42 =0.58 =0.7 -Refer to Exhibit 7.11.Calculate the expected standard deviation of the two stock portfolio.

As the number of risky assets in a portfolio increases,the total risk of the portfolio decreases.

A portfolio is efficient if no other asset or portfolios offer higher expected return with the same (or lower)risk or lower risk with the same (or higher)expected return.

Between 1990 and 2000,the standard deviation of the returns for the NIKKEI and the DJIA indexes were 0.18 and 0.16,respectively,and the covariance of these index returns was 0.003.What was the correlation coefficient between the two market indicators?

The combination of two assets that are completely negatively correlated provides maximum returns.

An individual investor's utility curves specify the tradeoffs he or she is willing to make between

Given a portfolio of stocks,the envelope curve containing the set of best possible combinations is known as the

An Overview of the Investment Process

The Asset Allocation Decision

The Global Market Investment Decision

Securities Markets: Organization and Operation

Security-Market Indexes

Efficient Capital Markets

An Introduction to Asset Pricing Models

Multifactor Models of Risk and Return

Analysis of Financial Statements

Security Valuation Principles

Macroanalysis and Microvaluation of the Stock Market

Industry Analysis

Company Analysis and Stock Valuation

Equity Portfolio Management Stragtegies

Technical Analysis

Bond Fundamentals

The Analysis and Valuation of Bonds

Bond Portfolio Management Strategies

An Introduction to Derivative Markets and Securities

Forward and Futures Contracts

Option Contracts

Swap Contracts,convertible Securities,and Other Embedded Derivatives

Professional Money Management, alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Investment Return and Risk Analysis Questions

Investment and Retirement Plans

Calculating Covariance and Correlation Coefficient of Assets

Portfolio Variance and Stock Weight Calculations

Portfolio Optimization with Negative Correlation: Finding Minimum Variance and Weight Allocation

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