The standard deviation of stock A is .60, while the standard deviation of stock B is .80. If the correlation coefficient for A and B is positive, then a portfolio that consists of 50% of stock A and 50% of stock B MUST have a standard deviation _________. Assume no short selling allowed.

a) Less than 0.5

b) Greater than 0.7

c) Greater than 0.5

d) Less than 0.6

e) Not enough information

You are 21 years old today. Starting one month from now, if you deposit $500 per month for 32 years into your retirement account which earns 0.7 percent per month, are you a millionaire by age of 53? Find out how much money you will have by age of 53. If that number is greater than one million, then you are a millionaire by that age.

Liquid mercury at 0.5 kg/s is to be heated from 300 to
400 K by passing it through a 50-mm-diameter tube
whose surface is maintained at 450 K. Calculate the
required tube length by using an appropriate liquid
metal convection heat transfer correlation. Compare
your result with that which would have been obtained
by using a correlation appropriate for Pr>= 0.7.

In an ideal Rankine cycle with reheat, superheated steam vapor enters the turbine at 10 MPa and
480 °C, while the condenser pressure is 6 kPa. Steam expands through the first-stage turbine to
0.7 MPa and then is reheated to 480 °C.
Calculate the total heat addition, net work of the cycle, heat extraction through condenser,
and thermal efficiency of this ideal Rankine cycle with reheat  

5. (i) Do the following functions exhibit increasing, constant, or decreasing returns to scale? (ii) Do the following functions exhibit diminishing returns to labor? Capital? Show how you know. a. q = 2L^1.25 + 2K^1.25 b. q = (L + K)^0.7 c. q = 3LK^2 d. q = L^1/2 K^1/2

What is the nominal return on short-term corporate paper if the liquidity premium is 0.5%, the default risk premium is 0.7%, and the inflation rate is 1.4%? Assume 0% real return.

Assume both A and B Factory sell short-term corporate paper to investors. If A Factory's yield to investors is 3% and B's is 4.3%, and both companies sell 3-month paper, what factor explains this difference?

McHuffter Condominiums, Inc., of Pensacola, Florida, recently purchased land near the Gulf of Mexico and is attempting to determine the size of the condominium development it should build. Three sizes of develop-ment are being considered; Small, d1; Medium, d2; and large, d3. At the same time, an uncertain economy makes it difficult to ascertain the demand for the new condominiums. McHuffter's management realizes that a large development followed by a low demand could be very costly to the company. However, if McHuffter makes a conservative small-development decision and then finds a high demand, the firm's profits will be lower than they might have been. With the three levels of demand-low, medium and high. McHuffter's management has prepared the following profit ($000). (20 pts.) payoff table ------------------------------------------- Demand Decision ---------------------------- Alternatives Low Medium High ------------------------------------------- Small, d1 400 400 400 Medium, d2 100 600 600 Large, d3 -300 300 900 -------------------------------------------- a) If nothing is known about the demand probabilities, what are the recommended decision using the Maximax(optimistic), Maximin (pessi- mistic), and Minimax regret approaches? b) If P(low) = 0.20, P(medium) = 0.35, and P(high) = 0.45, What is the recommended decision using the expected value approach? c) What is the expected value of perfect information (EVPI)? You have to use regret table to get EVPI. Suppose that before making a final decision, McHuffter is considering conducting a survey to help evaluate the demand for the new condominium development. The survey report is anticipated to indicate one of two levels of demand: weak(W) or strong(S). The relevant probabilities are as follows: (25 pts) P(W)= 0.3 P(low/W) = 0.50 P(low/S) = 0.10 P(S)= 0.7 P(medium/W)= 0.40 P(medium/S)= 0.25 P(high/W) = 0.10 P(high/S) = 0.65 BDSC 340.001-3 d) Construct a decision tree for this problem and analyze it. e) What is McHuffter’s optimal decision? f) What is the expected value of the survey(sample) information? McHuffter Condominiums, Inc., of Pensacola, Florida, recently purchased land near the Gulf of Mexico and is attempting to determine the size of the condominium development it should build. Three sizes of develop-ment are being considered; Small, d1; Medium, d2; and large, d3. At the same time, an uncertain economy makes it difficult to ascertain the demand for the new condominiums. McHuffter's management realizes that a large development followed by a low demand could be very costly to the company. However, if McHuffter makes a conservative small-development decision and then finds a high demand, the firm's profits will be lower than they might have been. With the three levels of demand-low, medium and high. McHuffter's management has prepared the following profit ($000). (20 pts.) payoff table ------------------------------------------- Demand Decision ---------------------------- Alternatives Low Medium High ------------------------------------------- Small, d1 400 400 400 Medium, d2 100 600 600 Large, d3 -300 300 900 -------------------------------------------- a) If nothing is known about the demand probabilities, what are the recommended decision using the Maximax(optimistic), Maximin (pessi- mistic), and Minimax regret approaches? b) If P(low) = 0.20, P(medium) = 0.35, and P(high) = 0.45, What is the recommended decision using the expected value approach? c) What is the expected value of perfect information (EVPI)? You have to use regret table to get EVPI. Suppose that before making a final decision, McHuffter is considering conducting a survey to help evaluate the demand for the new condominium development. The survey report is anticipated to indicate one of two levels of demand: weak(W) or strong(S). The relevant probabilities are as follows: (25 pts) P(W)= 0.3 P(low/W) = 0.50 P(low/S) = 0.10 P(S)= 0.7 P(medium/W)= 0.40 P(medium/S)= 0.25 P(high/W) = 0.10 P(high/S) = 0.65 BDSC 340.001-3 d) Construct a decision tree for this problem and analyze it. e) What is McHuffter’s optimal decision? f) What is the expected value of the survey(sample) information?

A firm has after rate income tax last year of $3.0. It’s depreciation expenses were 0.2 million, and its total cash flow was $3.0 million. What happened to the net working capital during the year.