Stock a has an expected return of 12%, a beta of 1.2, and a standard deviation of 20%. stock b also has a beta of 1.2, but its expected return is 10% and its standard deviation is 15%. portfolio ab has $900,000 invested in stock a and $300,000 invested in stock b. the correlation between the two stocks' returns is zero (that is, ra, b = 0). which of the following statements is correct?

a. portfolio ab's expected return is 11.0%.

b. portfolio ab's beta is less than 1.2.

c. portfolio ab's standard deviation is 17.5%.

d. the stocks are not in equilibrium based on the capm; if a is valued correctly, then b is overvalued.

e. the stocks are not in equilibrium based on the capm; if a is valued correctly, then b is undervalued.

show work / formulas in excel!

Roi analysis using dupont model. charlie? s furniture store has been in business for several years. the firm? s owners have described the store as a ? high-price, highservice? operation that provides lots of assistance to its customers. margin has averaged a relatively high 32% per year for several years, but turnover has been a relatively low 0.4 based on average total assets of $800,000. a discount furniture store is about to open in the area served by charlie? s, and management is considering lowering prices in order to compete effectively. required: a. calculate current sales and roi for charlie? s furniture store. b. assuming that the new strategy would reduce margin to 20%, and assuming that average total assets would stay the same, calculate the sales that would be required to have the same roi as they currently earned. c. suppose that you presented the results of your analysis in parts a and b of this problem to charlie, and he replied, ? what

At a student café, there are equal numbers of two types of customers with the following values. the café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). students with early classes students without early classes coffee 70 60 banana 51 101 the marginal cost of coffee is 10 and the marginal cost of a banana is 40. the café owner is considering three pricing strategies: 1. mixed bundling: price bundle of coffee and a banana for 161, or just a coffee for 70. 2. price separately: offer coffee at 60, price a banana at 101. 3. bundle only: coffee and a banana for 121. do not offer goods separately. assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. for simplicity, assume there is just one student with an early class, and one student without an early class. price strategy revenue from pricing strategy cost from pricing strategy profit from pricing strategy 1. mixed bundling $ $ $ 2. price separately $ $ $ 3. bundle only $ $ $ pricing strategy yields the highest profit for the café owner.

If the family’s net monthly income is 7,800 what percent of the income is spent on food clothing and housing?