5. (5 points) Home bias may occur because a. required information costs are too expensive b. equities do not provide any inflation hedge c. financial institutions provide no available vehicle for diversification d. domestic investors are hostile against foreign investors (Problems 6 and 7) First, suppose the U.S. beta of Comcast Corporation is 1.27, that is, 1.27. Second, let us assume that the expected return on the U.S. market portfolio is 12.77 percent, that is, RUS 12.77%, and that the risk-free interest rate is 1.17 percent, that is, R.-1.17%. Third, suppose that the world beta measure of Comcast stock is 0.84, that is, B0.84. In addition, assume that the expected ret Rw = 14.09%. urn on the world market portfolio is 14.09 percent, that is 6. (6 points) IrUS, capital markets are segnented fros the rest of the world, the espected retura on Comcast stock will be determined as a. 12.02% b. 13.01% C. 15.90% d. 17.39% 7. (5 points) Suppose now that U.S. capital markets are integrated with the rest of the world. Then the expected return on Comeast stock can be computed as a. 12.02% b. 13.01% c. 15.00% d. 17.39% 8. (5 points) According to the product life-cycle theory a. over time the United States switches from a demand-driven country of new products to a supply-driven country b. over time less advanced countries switch from a supply-driven country of new products to a demand-driven country exporting country an exporting country c. over time the United States switches from an importing country of new products to an d. over time less advanced countries switch from an importing country of new products to 3