Which of the following is NOT true: Select one: a. When an exchange-traded call option on IBM stock is exercised, IBM issues more stock. b. An American option can be exercised at any time during its life. c. A call option will always be exercised at maturity if the underlying asset price is greater than the strike price. d. A put option will always be exercised at maturity if the strike price is greater than the underlying asset price.

The total value of your portfolio is $10,000: $3,000 of it is invested in stock a and the remainder invested in stock b. stock a has a beta of 0.8; stock b has a beta of 1.2. the risk premium on the market portfolio is 8%; the risk-free rate is 2%. additional information on stocks a and b is provided below. return in each state state probability of state stock a stock b excellent 15% 15% 5% normal 50% 9% 7% poor 35% -15% 10% what are each stock’s expected return and the standard deviation? what are the expected return and the standard deviation of your portfolio? what is the beta of your portfolio? using capm, what is the expected return on the portfolio? given your answer above, would you buy, sell, or hold the portfolio?