Greta, an elderly investor, has a degree of risk aversion of a = 3 when applied to return on wealth over a one-year horizon. she is pondering two portfolios, the s& p 500 and a hedge fund, as well as a number of one-year strategies. (all rates are annual and continuously compounded.) the s& p 500 risk premium is estimated at 5% per year, with a sd of 20%. the hedge fund risk premium is estimated at 10% with a sd of 35%. the returns on both of these portfolios in any particular year are uncorrelated with its own returns in other years. they are also uncorrelated with the returns of the other portfolio in other years. the hedge fund claims the correlation coefficient between the annual returns on the s& p 500 and the hedge fund in the same year is zero, but greta is not fully convinced by this claim. compute the estimated annual risk premiums, sds, and sharpe ratios for the two portfolios

Google started as one of many internet search engines, amazon started as an online book seller, and ebay began as a site where people could sell used personal items in auctions. these firms have grown to be so large and dominant that they are facing antitrust scrutiny from competition regulators in the us and elsewhere. did these online giants grow by fairly beating competition, or did they use unfair advantages? are there any clouds on the horizon for these firms -- could they face diseconomies of scale or diseconomies of scope as they continue to grow? if so, what factors may limit their continued growth?

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.

Bob, an employee at machina corp., is well known among his colleagues because of his temper and impatience. during a heated argument with one of his supervisors, he reacts with hostility. bob's manager calls him in for a discussion and listens to what he has to say about the incident, while treating him with dignity and respect. this scenario can be best categorized as one that used