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HELP ME SOLVE ALL THREE IF POSSIBLE, OR JUST SOLVE 1 AND 3 Consider an economy with two types of firms, S and I. S

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image text in transcribedimage text in transcribedHELP ME SOLVE ALL THREE IF POSSIBLE, OR JUST SOLVE 1 AND 3

Consider an economy with two types of firms, S and I. S firms always move together, but I firms move independently of each other. For both types of firm there is a 70% probability that the firm will have a 20% return and a 30% probability that the firm will have a -30% return. The standard deviation for the return on an individual firm is closest to: 0 23.0%. 5.25%. 15.0%. 10.0%. Big Cure and Little Cure are both pharmaceutical companies. Big Cure presently has a potential "blockbuster" drug before the Food and Drug Administration (FDA) waiting for approval. If approved, Big Cure's blockbuster drug will produce $1 billion in net income for Big Cure. Little Cure has 10 separate less important drugs before the FDA waiting for approval. If approved, each of Little Cure's drugs would produce $100 million in net income for Little Cure. The probability of the FDA approving a drug is 50%. What is the standard deviation of Big Cure's average net income for their new blockbuster drug? $0 $1 billion $100 million 0 $500 million Use the following information to answer the question(s) below. Ticker Beta F 2.77 Company Ford Motor Company International Business Machines IBM 0.73 Merck MRK 0.90 If the expected return on the market is 11% and the expected return of investing in Merck is 10.35%, then the risk-free rate must be: 3.0%. 4.0%. 4.5%. 5.0%

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