Which of the following statements is correct? a. if mutual fund a held equal amounts of 100 stocks, each of which had a beta of 1.0, and mutual fund b held equal amounts of 10 stocks with betas of 1.0, then the two mutual funds would both have betas of 1.0. thus, they would be equally risky from an investor's standpoint, assuming the investor's only asset is one or the other of the mutual funds. b.if investors become more risk averse but rrf does not change, then the required rate of return on high-beta stocks will rise and the required return on low-beta stocks will decline, but the required return on an average-risk stock will not change. c.there is no reason to think that the slope of the yield curve would have any effect on the slope of the sml. d.an investor who holds just one stock will generally be exposed to more risk than an investor who holds a portfolio of stocks, assuming the stocks are all equally risky. since the holder of the 1-stock portfolio is exposed to more risk, he or she can expect to earn a higher rate of return to compensate for the greater risk. e.assume that the required rate of return on the market, rm, is given and fixed at 10%. if the yield curve were upward sloping, then the security market line (sml) would have a steeper slope if 1-year treasury securities were used as the risk-free rate than if 30-year treasury bonds were used for rrf.

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Onsider the following subscription behavior information from genie, a web site that provides tools for constructing a family tree (ancestor search). subscriptions cost $9.99 per month, but you are charged for the entire year at the time of purchase. there is a one-year minimum term when you sign up for the service. once purchased, subscriptions are set to renew automatically unless the subscriber cancels them. when a membership renews, it renews for a one-year term and again you are charged for the entire year. there are no variable costs associated with providing this service to an individual customer, but genie does engage in customer relationship activities that they believe will increase customer retention. these customer relationship activities cost genie about $10 per year per customer. based on a sample of 1000 customers that joined genie five years ago, near the time when the company was founded, they were able to determine how many of those customers remained subscribers in the second year, third year etc. based on this information, genie calculated the average annual retention rate to be 20%. genie uses an annual discount rate of 8%. a. last year, genie spent $10,000 placing advertisements on google. genie management believes that these advertisements were responsible for about 300 new subscribers. would you recommend to genie management that they purchase more google ads? b. suppose a newly-introduced loyalty program increases the number of customers that remained to 30%. does this new data change your answer to 9.a? c. do you have any hesitations or concerns about making recommendations to management based on your above estimate of customer lifetime value?

Diamond motor car company produces some of the most luxurious and expensive cars in the world. typically, only a single dealership is authorized to sell its cars in certain major cities. in less populous areas, diamond authorizes a single dealer for an entire state or region. the manufacturer of diamond automobiles is using a(n) distribution strategy for its product.