Suppose intel stock has a beta of 1.6, whereas boeing stock has a beta of 1. if the risk-free interest rate is 4% and the expected return of the market portfolio is 10%, according to the capm, a. what is the expected return of intel stock? b. what is the expected return of boeing stock? stock price/share ($) number of shares outstanding (millions) golden seas 13 1.00 jacobs and jacobs 22 1.25 mag 43 30 pdjb 5 10 m12_berk5561_04_se_c12.indd 400 12/10/16 12: 03 am chapter 12 systematic risk and the equity risk premium 401 c. what is the beta of a portfolio that consists of 60% intel stock and 40% boeing stock? d. what is the expected return of a portfolio that consists of 60% intel stock and 40% boeing stock? (show both ways to solve this.)

What is the most important factor that affects the value of a company? a) cash flow b) earnings c) supply and demand d) number of employees

The amberssen specialty company is a chain of twelve retail stores that sell a variety of imported gift items, gourmet chocolates, cheeses, and wines in the toronto area. amberssen has an is staff of three people who have created a simple but effective information system of networked point-of-sale registers at the stores and a centralized accounting system at the company head- quarters. harry hilman, the head of amberssens is group, has just received the following memo from bill amberssen, sales director (and son of amberssen’s founder). harry—it’s time amberssen specialty launched itself on the internet. many of our competitors are already there, selling to customers without the expense of a retail storefront, and we should be there too. i project that we could double or triple our annual revenues by selling our products on the internet. i’d like to have this ready by - giving, in time for the prime holiday gift-shopping season. bill after pondering this memo for several days, harry scheduled a meeting with bill so that he could clarify bill’s vision of this venture. using the standard con- tent of a system request as your guide, prepare a list of questions that harry needs to have answered about this project.

The larger the investment you make, the easier it will be to: get money from other sources. guarantee cash flow. buy insurance. streamline your products.