You decide to form a portfolio of that is composed of $60\%$ Rivian and $40\%$ Lucid $($Tickers: RIVN & LCID, respectively$).$ You observe that the expected returns of RIVN & LCID are, RRIVN$=15\%$ and RLCID$=20\%,$ and the standard deviation of those returns are $\backslash$sigma RIVN$=50\%$ and $\backslash$sigma LCID$=40\%.$ Finally, RIVN and LCID are both EV companies, so their returns are strongly, but less than perfectly correlated. From this information you can conclude that your portfolio$$s

A$.$ expected return is $17\mathrm{.}5\%,$ and its standard deviation is less than $45\%.$

B$.$ expected return is less than $17\%,$ and its standard deviation is equal to $46\%.$

C$.$ expected return is $17\%,$ and its standard deviation is less than $46\%.$

D$.$ expected return is $17\%,$ and its standard deviation is equal to $46\%.$

E$.$ expected return is less than $17\%,$ and its standard deviation is less than $46\%.$

Alpha Corp is considering a project that has similar risk characteristics as the rest of Alpha. The project requires an investment of $$4$ million and is expected to generate cash flows of $$600,000$ per year forever. Alpha$$s cost of capital is $12\mathrm{.}5\%.$ The CFO of Alpha likes to rely on the NPV Rule, while the CEO is a returns guy and favors the IRR Rule. How is Alpha likely to think about this project?

A$.$ The NPV $<0$ & the IRR $>12\mathrm{.}5\%,$ so the CFO and CEO disagree about what to do$.$

B$.$ The NPV $=0$ so the IRR is $12\mathrm{.}5\%,$ and both the CFO and CEO agree on what to do$.$

C$.$ The NPV $<0$ & the IRR $<12\mathrm{.}5\%,$ so both the CFO and CEO agree on what to do$.$

D$.$ The NPV $>0$ & the IRR $>12\mathrm{.}5\%,$ so both the CFO and CEO agree on what to do$.$

E$.$ The NPV $>0$ & the IRR $<12\mathrm{.}5\%,$ so the CFO and CEO disagree about what to do$.$

You are offered the possibility to do a real estate investment of $$100,000$ today. You expect to be able to sell it for $$118,000$ before taxes at the end of year $1.$ There is a $40\%$ tax rate on capital gains $($difference between the amount received and paid$).$ The IRR of this investment is $$

A$.12\%$

B$.9\mathrm{.}6\%$

C$.10\mathrm{.}8\%$

D$.18\%$

E$.13\mathrm{.}2\%$

You are analyzing the value of the Rubbish Company $($Ticker: RUB$)$ using the adjusted present value model. RUB has a capital structure that is half debt and half equity. RUB has $$1$ billion of $6\%$ debt trading at par, and a cost of equity of $12\%.$ The tax rate is $21\%.$ You expect the market value of the entire RUB firm to remain at the current level of $$2$ billion, and you expect RUB to maintain their $50-50$ capital structure. Under these circumstances, and assuming RUB$$s tax shield is as risky as the rest of RUB$$s operations, the value of RUB$$s tax shield is

A$.$ $$252$ million

B$.$ $$145\mathrm{.}6$ million

C$.$ $$210$ million

D$.$ $$140$ million

E$.$ $$666\mathrm{.}7$ million