Q1:

A portfolio has 50?% of its value in IBM shares and the rest in Microsoft? (MSFT). The volatility of IBM and MSFT are? 35% and? 30%, respectively, and the correlation between IBM and MSFT is 0.1. What is the standard deviation of the? portfolio?

Q2:

Suppose you invest in 150 shares of? Harley-Davidson at? $40 per share and 200 shares of Yahoo at? $25 per share. If the price of? Harley-Davidson increases to? $50 and the price of Yahoo decreases to? $20 per? share, what is the return on your? portfolio?

Q3:

Verano Inc. has two business divisions a software product line and a waste water? clean-up product line. The software business has a cost of equity capital of 11?% and the waste water? clean-up business has a cost of equity capital of 6%. Verano has? 50% of its revenue from software and the rest from the waste water business. Verano is considering a purchase of another company in the waste water business using equity financing. What is the appropriate cost of capital to evaluate the? business?

OA. OB. OC. OD. 20.54% 26.58% 24.16% 27.79%