You have two stocks, Alpha Software and Beta Electronics. Alpha has an average return of 6.9% and risk (standard deviation) of 30.9%; Beta has an average return of 10.8% and risk (standard deviation) of 50.8%. If their returns are perfectly negatively correlated, what is the standard deviation of a portfolio that invests 62.5% in Alpha and 37.5% in Beta?

A.

27.13%

B.

0.26%

C.

38.36%

D.

0%

E.

55.68%

It has been speculated that the free-trading app Robinhood might go public in the near future. Lets say that Robinhood completes its IPO sometime this year and is able to sell 11,300,000 shares of stock at an offer price of $10.15 per share. Furthermore, lets assume that Robinhoods closing stock price on the first day of trading on the secondary market is $14.65. Calculate the gross proceeds for Robinhoods IPO and Robinhoods IPO underpricing.

A.

$114,695,000; $4.5

B.

$165,545,000; $4.5

C.

More information needed to do the calculation

D.

$165,545,000; -$4.5

E.

$114,695,000; -$4.5