You currently own shares in Buckeye Mutual Fund (BMF). Your broker calls and recommends buying shares in a small-capitalization fund managed by Wolverine Investment Group (WIG). Your broker says that this fund will provide significant diversification benefits for your existing holdings. She gives you the following statistics based on the performance of the two funds over the last year.

Portfolio E(return) Std. Dev.
Buckeye Mutual fund 20% 14%
Wolverine investment Grp. 12% 11%

Assume you can earn an average annual yield of 8% on a risk-free security. Which of these funds would be the optimal fund to combine with the risk-free security?

a. Buckeye
b. Wolverine
c. Neither Buckeye nor Wolverine
d. Both are equally good
e. There is not enough information to answer this question

Goals that are overly ambitious can discourage employees and decrease motivation, yet the idea of stretch goals is proposed as a way to get people fired up and motivated. as a manager, how might you decide where to draw the line between a “good” stretch goal and a “bad” one that is unrealistic?

Consider how health insurance affects the quantity of health care services performed. suppose that the typical medical procedure has a cost of $160, yet a person with health insurance pays only $40 out of pocket. her insurance company pays the remaining $120. (the insurance company recoups the $120 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.) consider the following demand curve in the market for medical care. use the black point (plus symbol) to indicate the quantity of procedures demanded if each procedure has a price of $160. then use the grey point (star symbol) to indicate the quantity of procedures demanded if each procedure has a price of $40. q d at p=$160 q d at p=$40 0 10 20 30 40 50 60 70 80 90 100 200 180 160 140 120 100 80 60 40 20 0 price of medical procedures quantity of medical procedures demand if the cost of each procedure to society is truly $160, the quantity that maximizes total surplus is procedures. economists often blame the health insurance system for excessive use of medical care. given your analysis, the use of care might be viewed as excessive because consumers get procedures whose value is than the cost of producing them.

Which of the following statements about revision is most accurate? (a) you must compose first drafts quickly (sprint writing) and return later for editing. (b) careful writers always revise as they write. (c) revision is required for only long and complex business documents. (d) some business writers prefer to compose first drafts quickly and revise later; others prefer to revise as they go.