Suppose you observe the following situation: state of economy probability of state of economy rate of return if state occurs stock a stock b boom .21 .189 .097 normal .74 .158 .076 recession .05 - .246 .042 assume the capital asset pricing model holds and stock a's beta is greater than stock b's beta by .84. what is the expected market risk premium?

a. 10.06 percent
b. 8.28 percent
c. 7.81 percent
d. 9.05 percent
e. 7.94 percent

Marvin wrote a check of $58.25 for the water bill and $450 for rent. he also made a deposit of $124.16. how much is his new balance after writing the checks and making the deposit?

Afinancial institution, the thriftem bank, is in the process of formulating its loan policy for the next quarter. a total of $12 million is allocated for that purpose. being a full-service facility, the bank is obligated to grant loans to different clientele. the following table provides the types of loans, the interest rate charged by the bank, and the possibility of bad debt as estimated from past experience.type of loaninterest rateprobability of bad debtpersonal.140.10car.130.07home.120.03farm.125.05commercial.100.02 bad debts are assumed unrecoverable and hence produce no interest revenue either. competition with other financial institutions in the area requires that the bank allocate at least 40% of the total funds to farm and commercial loans. to assist the housing industry in the region, home loans must equal at least 50% of the personal, car, and home loans. the bank also has a stated policy specifying that the overall ratio for bad debts on all loans may not exceed .04. formulate this problem as a linear program. define your variables clearly and write all the constraints explaining the significance of each.

Your take on decision making process