3. Which of the following statements is correct? a. If a firm\'s stockholders ar

Question

3. Which of the following statements is correct? a. If a firm's stockholders are well diversified, we know from theory and from studies of market behavior that corporate risk is not important. b. Undiversified stockholders, including the owners of small businesses, are more concerned about corporate risk than market risk. c. Empirical studies of the determinants of required rates of return (k) have found that only market risk affects stock prices d. Market risk is important but does not have a direct effect on stock price because it only affects beta. e. Market risk does not play any role in determining the rate of return on an investment. 4. Orangetree Pharma's demand for test tubes is 72,000 units. If the lead time for placing an order is 5 days, then an order should be placed at an inventory level of: (Assume 360 days in a year) a. 625 units. b. 800 units. c. 1,250 units. d. 1,000 units. e. 2,500 units.

Explanation / Answer

Question - 3 ...............Option - c

Question - 4 ................Option - d 1000 Units

Demand for a day = 72000 / 360 = 200 Units

Lead time requirement = 5 days * 200 = 1000

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