Assume that investors have recently become more risk averse, so the market risk premium has increased. also, assume that the risk-free rate and expected inflation have not changed. which of the following is most likely to occur? a. the required rate of return on the market, rm, will not change as a result of these changes. b. the required rate of return will decline for stocks whose betas are less than 1.0. c. the required rate of return for an average stock will increase by an amount equal to the increase in the market risk premium. d. the required rate of return on a riskless bond will decline.

Emery pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. emery uses 825 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $48 per order. the cost schedules of two suppliers are as follows: vendor 1 vendor 2 quantity price/lb quantity price/lb 1-499 $17 1-399 $17.10 500-999 $16.75 400-799 $16.85 1000+ $16.50 800-1199 $16.60 1200+ $16.25 (a) what is the economic order quantity for each supplier? (b) what quantity should be ordered and which supplier should be used? (c) the total cost for the most economic order sire is $