Arbor Systems and Gencore stocks both have a volatility of 33%. Compute the volatility of a portfolio with 50% invested in each stock if the correlation between the stocks is (a) +1.00, (b) 0.50, (c) 0.00, (d) −0.50, and (e) −1.00. In which of the cases is the volatility lower than that of the original stocks?

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51

Which of the following best explains the purpose of protectionist trade policies such as tariffs and subsidies? a. they make sure that governments have enough money to pay for fiscal policies. b. they give foreign competitors access to new markets around the world. c. they allow producers to sell their products more cheaply than foreign competitors. d. they enable producers to purchase productive resources from everywhere in the world.

Governments sometimes erect barriers to trade other than tariffs and quotas. which of the following is not an example of this type of trade barrier? a. a requirement that the employees of domestic firms that engage in foreign trade pay income taxes b. restrictions on imports for national security reasons c. a requirement that imports meet health and safety requirements d. a requirement that the u.s. government buy military uniforms only from u.s. manufacturers